From dungan@stanford.edu Mon Feb 3 16:19:45 1997 Subject: Change in property threshold Colleagues, The long anticipated increase of the capital property threshold is now in effect. A rather long memo covering the details of this change was issued at the end of last week by GCRS and the Controller's Office. You can view it in the property section of our web site, or directly at http://www-era/threshold.html The balance of this note summarizes the major changes. 1. New capitalization threshold for assets, including fabrications, is now $1500. GL codes have been changed to reflect the new threshold. 2. Effective date: 2/1/97, retroactive to 9/1/96. 3. This section applied to SPONSORED PROJECTS ONLY. Waiver: Indirect costs for items between $500 and $1499 that, under the old rules would have been a capital asset, and fabrications between $1000 and $1499 are waived from 9/1/96 onward (see further information below!). As a result, there is no financial impact to sponsored accounts by this change in capitalization threshold. The waiver is automatically granted to all sponsored accounts. You do not have to apply for the waiver for items received 9/1/96 through 1/31/97; they will be handled within the accounting system (probably in March) by the Controller's Office. For items between the old and new thresholds purchased/received after 2/1/97, you must use one of the NEW GL codes to take advantage of the waiver. New GL Code Purpose - see memo for details ------- --------------------------------------------------------- 94661 Special purpose equipment (used for research, medical, scientific, instructional or other technical activities) costing $500 to 1499 that would have been capitalized in the past. 94662 General purpose equipment costing $500 to 1499 that would have been capitalized in the past. 94663 Fabrications costing $1000 to 1499 that would have been capitalized in the past. These GL codes are to be used **ONLY** on sponsored project accounts. 4. Additional information from University Property Administration regarding the asset management process should be issued sometime this month. Questions regarding these changes should be directed to your property administrator or me. Dave 3-0949 ------- Subject: Ordering Equipment, Capital and Non-capital From Dave Dungan Dec 9, 97 06:18:31 pm Colleagues, This is an important message for everyone who originates or approves capital requisitions whether charged to university or sponsored accounts. Dave Background Last winter, the capital threshold was raised to $1500 and a special set of GL codes were opened so PI's could take advantage of a waiver of indirects on equipment purchases between $500 and $1499.99. A couple of months later the new inventory system, CAMS, went online. For the first time, our inventory database must balance with procurement transactions that are recorded in the general ledger. Specifying the correct GL is now essential. What does that mean? All expenditures charged to capital asset GLs must match assets recorded in CAMS. Requisitions must be prepared specifying multiple GLs if capital and non-capital items are ordered on the same requisition. Here's an example of what happens when a "mixed" requisition is submitted using a single GL, 94427 (computer equip) in this example, When you create a requisition like: 1. Nifty PDQ color laser printer $4500 2. Deluxe facsimile w/duplex 1295 (let's ignore tax and delivery charges and adjustments to keep it simple) When the transaction is completed and paid, SNAP posts a capital expenditure of $5795 into the GL (using 94427). But, since only the printer gets tagged as capital equipment and entered into CAMS, the ledger doesn't balance by $1295. This order should have been submitted like this: While filling out the SNAP online form, the originator should have entered "y" on the line next to "More accounts?" near the top right of the form. Then entered the appropriate division of costs like: 1 1DZZ123 94427 $ 4500 Y 2 1DZZ123 94623 $ 1295 Y In order to fix this example, a journal must be processed to correct the GL code of item 2. It should be 94623 (general purpose items) or possibly 94662 (general purpose items, sponsored accounts only). So why am I making a big deal about this? A few weeks ago the School received a list of 872 items purchased as capital assets that the accounting system could not reconcile. This list is based on items received through July - we know there are more. Most of the unreconciled items were caused by the use of wrong GL codes. ERA submitted correction journals for the items that we had information about (mostly on sponsored accounts) and sent the remaining items to departments for resolution. Below are the GL codes that are frequently involved in problem requisitions. If you have questions about what GL to use contact your DPA for guidance. DPAs have been directed to return requisitions when the GL code appears incorrect. If you are working from a paper copy of the GL Codes listing that is more than a couple of months old, it is probably out of date. You can review or print an up-to-date version in Prism: prism//select sufin gl Selected GL Codes: A. Capital Items - $1500 or more acquisition cost, with a life of two or more years. 94420 Office furniture & equipment. Desks, safes, chairs, table, etc. 94421 Scientific/Technical equipment. Scanners, microscopes, analyzers lab coolers, freezers & ovens, amplifiers 94423 Modular furniture. 94426 Fabrications $1500 and up. 94427 Computer equipment. CPU, magnetic and other storage devices, printers, other peripheral, word processors. 94428 General purpose capital item that don't meet another category. 94429 Other data handling equipment. Copiers, fax machines, duplicating machinery B. Non-capital purchases of items costing less than $1500. 94610 Department (office) general expense. 94611 Laboratory general expense 94621 Tools 94622 Technical items. Examples: refrigeration units, measurement equipment, lasers, analyzers (see Section C) 94623 General purpose items.Examples: fax machines, computers, copiers, office furnishings (see Section C) 96624 Equipment modifications of less than $1500, or do not change performance and life of the equipment being modified. 94628 Computer software, less than $500,000. 94632 Chemicals and compressed gases. C. Special GLs to be used only for non-capital assets between $500-1499.99 and a useful life of two or more years purchased on sponsored projects. 94661 Technical items. Examples: refrigeration units, measurement equipment, lasers, analyzers 94662 General purpose items. Examples: fax machines, computers, copiers, office furnishings 94663 Fabrications between $1000-1499.99