Constructed equipment:
Constructed equipment exists for various reasons including the following:
- The equipment with desired function is not available in the market;
- It is cost-saving to build equipment; or
- A research project is focused on creating a new piece of equipment.
Constructed equipment consists of multiple parts (small and/or large). Therefore, parts with cost of less than $5,000 can still be posted to equipment subaccount range (62XX).
Starting New Constructed equipment:
Before placing the first purchase order for a new piece of constructed equipment, a constructed equipment form (Constructed_Equipment_Form.pdf) is required to be completed and sent to CAA (capitalassets@uchicago.edu) so that all expenses related to the same piece of equipment are capitalized properly.
A specific 10 digit account (master account No. and subaccount No.) will be designated to one piece of constructed equipment in FAS with an assigned tag number. The subaccount assigned will be given a description to help with tracking purposes. If more than one or any new FAS account is determined to fund the existing constructed equipment, please inform CAA so the new expenses under the additional/ new account(s) can be appropriately designated and capitalized at year-end.
The usage of subaccount 6200 is discouraged, as it cannot be assigned a specific description in FAS and might potentially contain expenses for multiple pieces of constructed equipment. For example, if two separate pieces of constructed equipment is being built on account 2-12345, and both are being coded to 6200, at year-end, they will be added as one asset, and then the equipment coordinator will need to analyze the costs in that subaccount and determine the cost per each piece of equipment. On the other hand, if a constructed equipment form is filled out and 2-12345-6201 is assigned to one piece of equipment and 2-12345-6202 is assigned to the other, at year-end, they will be added separately and no additional work will be needed on the back end.
Capitalization of Constructed Equipment:
Capitalization criteria still applies to constructed equipment. Not everything related to a piece of equipment should be capitalized. For example, replacement parts should be posted to maintenance subaccount 3300 and lab consumables should be posted to lab supplies subaccount 5400.
Additionally, if the equipment is fully built/ in use and it is under $5K, the assets will need to be disposed of as it should have been taken as an expense. When the construction is complete and equipment is in usable condition, please update CAA and the subaccount code will be recycled for another piece of equipment if needed.
At year-end, new constructed equipment is added per subaccount description. As new constructed equipment is added as a total for the year under each account and sub account combination, it is very important to review your constructed equipment charges throughout the year to ensure everything is related to that piece of constructed equipment.
Disposing of Constructed Equipment
Refer to the disposal section of the ‘Capital Assets – Equipment’ section of the Financial Services Website: http://finserv.uchicago.edu/dcaa/equipment/disposal.shtml
If a piece of constructed equipment is complete and cannot be used for its intended purpose, please submit a disposal form.