Purchasing

Capital Inventory Program

UWSP is required by System Administration to update our campus property values annually. See the important Capital Inventory Maintenance & Compliance Reminder from Ruth Porrey, University Controller.

The UWSP Capital Inventory Program maintains records of all capital equipment owned by UWSP. For more information about capital inventory, contact Sherry Lazar, extension 4543.

The aspects of the program are explained below:

What is Capital Equipment

Capital equipment is defined as any single asset which has an acquisition cost of $5,000 or more and a useful life of more than one year, whether purchased outright, acquired through a capital lease or through donation. If an old item is traded in on the purchase of a new item, the trade-in value should be added to the cash paid to arrive at the valuation of the equipment. It also includes certain constructed or fabricated items and certain component parts.

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Lease Purchased Equipment

Equipment purchased under a lease purchase agreement shall be capitalized if it meets one of the following tests:

  • The lease transfers ownership of the property to the university.
  • The lease contains a bargain purchase option.
  • The lease term (including any bargain renewal options) is equal to 75% or more of the estimated economic life of the leased property.
  • The present value of the minimum lease payments equals or exceeds 90% of the fair market value of the leased property.

The leased item should be added to the capital equipment inventory at the present value of all of the minimum lease payments over the life of the lease.

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Constructed and Fabricated Equipment

Constructed equipment shall be capitalized if the cost of material and labor incurred by the UW institution is $5000 or more and its useful life is one or more years. Labor costs should be included only when these cost are documented by an external source or in house shop. Documentation normally would include internal or external requisitions.

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Component Parts

Component parts which individually cost less than the capitalization level but when combined exceed the capitalization level, shall be capitalized when purchased as a functional unit.

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Physical Inventory Requirements

System Administration requires that a physical inventory of capital equipment be performed every two years in order to verify that the capital equipment listed on the inventory records can be located and is in use.

Prior to the physical inventory, each department will be asked to verify that all capital equipment for which it is responsible, including that used by employees at home or off the UW premises, can be located and is in use. Inventory records will be updated accordingly in order to minimize the number of errors in physical inventory.

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Inventory System Information Requirements

UWSP Purchasing ensures that newly acquired capital equipment is added to the inventory records and that capital equipment removed from use is deleted from the inventory records. Location of capital equipment is updated as changes occur to ensure that persons taking a physical inventory are able to easily locate all items listed on the inventory system.

The following information about each capital item is maintained:

  • Equipment description and manufacturer's name
  • Serial number, model number, and UW inventory number
  • Location (building and department and name of employee if assigned for use off UW premises)
  • Type of equipment (generally identified by first two digits of the commodity code)
  • Purchase order number
  • Acquisition date (fiscal year)
  • Acquisition cost or value
  • Source of funding (each appropriation, if multiple)
  • Account number (if applicable)
  • Holder of title if other than the UW

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Write-off and Disposal of Inventoried Items

Any piece of capital equipment which has ceased to function properly and any piece which is no longer needed by the department should be disposed of and removed from the inventory records.

Information regarding capital equipment items which have been removed from the inventory records will  be maintained for one year. Ultimate disposition data shall include ddate of disposal and method of disposal. Method of disposal includes trade-in, sale price, loss, theft or salvage.

Fully depreciated assets which are still being utilized should remain on the inventory records.

For more information on the UWSP Surplus Property Program see: Surplus Property.

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