For FY 1998-99 (Transition Year)

1. General Guideline:

   Equipment received during FY 1998 99 will continue to use the $500 or more per unit and more than two years of useful life criteria for reporting and indirect cost recovery purposes. Furniture received during FY 1998 99 costing $1,500 or more per unit (except "system furniture" as defined in the last section of this document) will now be considered equipment.

2. Accounting:
   1. Equipment items costing $1,500 or more per unit should be charged to the appropriate equipment NCA per current campus guidelines.

   2. To facilitate accurate indirect cost rate computations, equipment received during FY 1998 99 costing between $500 and $1499.99 per unit should be charged to special equipment NCA 448000, regardless of fund source or DPA. Overhead will not be assessed against equipment charged to this special NCA. (This special NCA should not be used for items received after FY 1998 99.)

   3. Furniture costing $1,500 or more per unit (except "system furniture") received during FY 1998 99 should be charged to equipment NCA 449950, regardless of fund source or DPA. Furniture costing less than $1,500 per unit and all "system furniture" should be charged to supply NCA 436260.

3. Purchasing:

   Equipment items costing at least $500 per unit, or furniture items costing at least $1,500 per unit (but excluding "system furniture") shall follow campus policy regarding equipment purchases (UCSF Administrative Policy Guide, policy 200 18 section III.C).

4. Equipment Inventory:
   1. Per the UCOP implementation plan, equipment items received during FY 1998 99 costing between $500 and $1499.99 per unit will not be placed on the campus equipment inventory, though they will be reported to UCOP. Therefore, you will not receive equipment inventory tags for such items.

   2. Equipment items, including furniture, costing $1,500 or more per unit (except "system furniture") will be placed on the campus equipment inventory and you will receive equipment inventory tags for such items.

5. Contract and Grant Proposals:
   1. If an equipment expenditure (and receipt of the equipment) is anticipated before July 1, 1999, continue to use the $500 equipment threshold, include in the 1998 99 proposal budget as equipment and do not apply overhead.

   2. If an equipment expenditure (and receipt of the equipment) is anticipated on or after July 1, 1999, items costing between $500 and $1499.99 that were formerly equipment should be classified as materials and supplies in proposal budgets (for 1999 00 and beyond) and overhead applied.

6. Recharge Activities:
   1. Equipment items costing at least $500 (or furniture items costing at least $1,500, but excluding "system furniture") placed in service in a recharge activity during FY 1998 99 are considered equipment and cannot be charged to the recharge operating fund. These items can be amortized by the recharge activity over their useful lives in accordance with the campus recharge policy (UCSF Administrative Policy Guide, policy 250-11).

   2. The amortization of such equipment items costing between $500 and $1,499.99 may continue as long as: a) the item continues to be used in the recharge activity, b) the item appears on the recharge activity's equipment amortization schedule, and c) the item is still within its useful life as originally determined – i.e. the item will remain amortizable by the recharge activity in subsequent fiscal years even though it no longer meets the then current definition of equipment.

   3. Because such equipment items costing between $500 and $1,499.99 will not be maintained on the campus equipment inventory, recharge activities must maintain adequate records supporting the cost of such items as long as amortization is claimed by the recharge activity.

For FY 1999-00 and Beyond

1. General Guideline:

   Equipment, including furniture (but excluding "system furniture" as defined in the last section of this document), received during FY 1999 00 or beyond is defined as items of tangible personal property costing $1,500 or more per unit with more than one year of expected useful life.
   

2. Accounting:
   1. Equipment items costing $1,500 or more per unit received during FY 1999 00 or after should be charged to the appropriate equipment NCA per current campus guidelines.

   2. Special equipment NCA 448000 for (former) equipment items costing between $500 and $1,499.99 should not be used after June 30, 1999. Instead, these items should be charged to an appropriate supply NCA.

   3. Furniture costing $1,500 or more per unit (except "system furniture") received during FY 1999 00 or after should be charged to equipment NCA 449950. Furniture costing less than $1,500 per unit and all "system furniture" should be charged to supply NCA 436260.

   4. Per UCOP implementation guidelines, the above procedures will apply after June 30, 1999, regardless of fund source and regardless of when any sponsored project award was made. Campus units are therefore advised that overhead will be assessed on sponsored projects for former equipment items noted in 2.b above which are charged to the sponsored project after June 30, 1999. Campus units are cautioned to plan accordingly.
   
   

3. Purchasing:

   Equipment items, including furniture (but excluding "system furniture") costing at least $1,500 per unit shall follow campus policy regarding equipment purchases (UCSF Administrative Policy Guide, policy 200 18 section III.C.). Items that were (formerly) equipment costing between $500 and $1,499.99 shall follow campus policy regarding non-equipment purchases contained elsewhere in UCSF Administrative Policy Guide, policy 200 18.
   

4. Equipment Inventory:

   Equipment items, including furniture (but excluding "system furniture"), costing $1,500 or more per unit will be placed on the campus equipment inventory and you will receive equipment inventory tags for such items.

5. Contract and Grant Proposals:
   1. All equipment expenditure anticipated after June 30, 1999, should use the $1,500 equipment threshold. Do not apply overhead to these items.

   2. Expenditures anticipated for items after July 1, 1999 costing between $500 and $1499.99 that were formerly equipment should be classified as materials and supplies in proposal budgets and overhead applied.
   
   

6. Recharge Activities:
   1. Items costing between $500 and $1499.99 which were formerly equipment and placed in service in a recharge activity during FY 1999 00 or beyond are now supplies. The full cost of these items should be charged directly to the recharge operating fund using an appropriate supply NCA. Because they are not equipment, campus recharge policy does not allow amortizing these costs over multiple years.

   2. Amortization of (former) equipment items costing between $500 and $1,499.99 and placed in service of the recharge activity before July 1, 1999 may continue as long as: a) the item continues to be used in the recharge activity, b) the item appears on the recharge activity's equipment amortization schedule, and c) the item is still within its useful life as originally determined when placed in service of the recharge activity.

   3. Because such (former) equipment items costing between $500 and $1,499.99 will not be maintained on the campus equipment inventory, recharge activities must maintain adequate records supporting the cost of such items as long as amortization is claimed by the recharge activity.

System Furniture

Per the UCOP implementation plan, "system furniture" is defined as any one of the following three types of furniture:

1. Panel/screen - non-load-bearing: All free standing panels or screens providing visual and/or acoustical separations which are intended to divide space, but are not used to physically support furniture items.

2. Panel supported systems: Individually connected panels and work surfaces, filing, storage and shelving components and accessories which receive their primary support from the panels and which, when combined, form complete workstations.

3. Modular systems furniture: Modular furniture made up of independent work surface and storage units with panels used as end panels or space dividers. Includes all modular furniture components that collectively are required to complete a workstation.

System furniture is not included in equipment because, by definition, components of system furniture do not function independently of one another and therefore do not individually qualify as items of equipment, regardless of acquisition cost. Although an assembled workstation might be considered an item of equipment, it is undesirable to tag and inventory separate workstations, because doing so would negate one of the chief advantages of system furniture – the ability to disassemble and reconfigure components with a minimum of inconvenience. Consequently, individual items of system furniture will not be capitalized and inventoried, although mass purchases of system furniture may be capitalized (e.g. as part of a new building) but not inventoried.

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