Property Accounting - FAQ's
1. When do I capitalize an item?
Capitalize only those items that have a unit cost equal to or greater than $5,000 and have a life expectancy of more than one year or are component parts integrated into existing equipment meeting the conditions mentioned.
2. What is a fabrication?
Fabrications are individual items which cannot function or stand alone and ultimately will have a unit cost of $5,000 or more.
3. A professor is leaving the University and wants to take some equipment with him; what should I do?
A professor who is leaving the University and wishes to transfer title of Rice-owned equipment should follow the steps below:
- Office of the Vice President for Administration (VPA) should receive a memo from the dean of the school, chair, department administrator, etc. indicating his belief that the transfer is appropriate for whatever reason(s), that the equipment is not something that should remain at Rice for other research and that the payment is fair to Rice University.
- Attach a detailed listing for Equipment Transferring from Rice University ( PDF or Excel ) of all equipment including the asset numbers and or the purchase order numbers and submit a copy to Property Accounting.
- Property Accounting will review the list to ensure clear title to equipment and advise VPA and department.
- Assuming no funding agency complications, no clouded title, or other problems, after touching base with the Provost's office, VPA will issue a bill of sale upon receipt of check or electronic transfer. The proceeds of the sale need to go back into the grants used to purchase the equipment if they remain open. The proceeds can go into a department designated fund or grant(s) subject to awards terms and conditions.
4. Where do I get Rice ID tags?
Rice ID tags are issued by the Property Accounting office. There are 3 different tags provided. White bar code tags are automatically sent to departments for purchases of $5,000 or more which meet the requirements as stated in question 1 above. Red tags are provided upon request only; these tags are for items less that $5,000 and for department control purposes only. It is not a requirement of the University but it is highly recommended that red tags are affixed to all items which lend themselves to be easily moved or frequently taken off campus (i.e. laptops, cell phones, ipods, etc.). For items expected to remain off campus, please refer to the Authorization to Remove Equipment from Rice University Form ( PDF ). Yellow tags are provided for all government titled equipment.
5. How often is inventory performed?
The University performs a physical inventory of all capitalized equipment biennially.
6. Can replacement parts be capitalized?
No, they cannot. When a part that belongs to an existing piece of equipment must be replaced due to wear and tear, the replacement part shall be purchased as expense and not as equipment.
7. What forms are required by Property Accounting and where can I get these forms?
Property Accounting uses a variety of forms. The Property Control Registration Form ( PDF , see Definitions ) and the Property Control Registration - Hazardous Form ( PDF , see Definitions ) are used to document new acquisitions, transfers, drops or any changes to an asset. The Authorization to Remove Equipment from Rice University Campus Form ( PDF ) is used to allow an asset to be temporarily relocated off campus. The Notice of Fabrication and Request for Fabrication Fund(s) Form ( PDF ) is used to establish and modify existing fabrications. These forms may be found in the Forms section on the Controller's Office web site, and/or in the Property Accounting Office.
8. A professor is transferring to Rice and wishes to bring some equipment with him; what should I do?
When an incoming professor transfers equipment from his/her previous university, the following actions are required:
- Complete the Transferred Property Form ( PDF or Excel ) and send it to Property Accounting in the Controller's Office with the required documentation (described below).
- Complete a Property Control Registration Form ( PDF ) for each piece of equipment.
- Provide a copy of the approval(s) to transfer equipment from previous institution.
- Provide documentation of original acquisition date and cost of each piece of equipment. (This allows Property Accounting to determine whether the items meet Rice's capitalization threshold.) If original purchasing information is not available, this information must be provided on the Transferred Property Form. In this case, the Property Accounting Office or other authorized official of the transferring institution must sign the form.
- If any of these items are part of a fabrication that is new to Rice, complete a Fabrication form. If they are part of an existing fabrication, provide the fund number.
- If any Rice Purchase Order(s) or invoice(s) payable to Rice have been created or paid in association with this transfer, provide a copy of each.
- If the previous institution is being paid as a condition of this transfer, provide a copy of the agreement, or a written description of the agreement, and the current status of payments.
9. What are Equipment Categories?
Capitalized Equipment (≥ $5,000) - Each item of equipment shall be identified by a unique number stamped on the bar code. A bar code with adhesive backing that provides a permanent bond will be affixed to items of equipment. Only University titled equipment will reflect this number. Equipment will be tagged in such a place to readily facilitate ownership identification and assistance in taking physical inventories which will be taken every two years.
Certain items of equipment do not lend themselves to being tagged, but they must be inventoried. In such cases, the items will be assigned an inventory control number but will not be tagged; the bar code tag having that inventory control number will be destroyed, kept on file in the Controller's Office, or mailed to the Department, if requested.
Components - Items purchased as new components for existing equipment shall be identified with the basic equipment. If components are to retain their individual identity, they will be tagged with the appropriate inventory tag. However, if the component is to be incorporated into other equipment and thereby lose its identity, it will not be tagged or inventoried. Instead, the value of the basic item will be increased by the value of the component.
Purchase Orders (PO) coded 75XXX accounts require partially completed Property Control Registration Form ( PDF ), which should be attached to the PO. If a Rice Asset Number has been assigned to the initial payment, indicate the asset number on all subsequent invoices.
Gifts of Equipment - Equipment received as gifts will be inventoried the same as other University equipment. The value assigned to equipment by the donor will be accepted except when inspection shows the value to be unrealistic. When the assigned value is unrealistic or no value was assigned by the donor, a fair market value will be determined and that figure entered as the value. Property Accounting will assign and send a bar code tag to the department.
Equipment under $5,000 - At the request of the department, equipment under $5,000 that is owned by the University will be identified by a tag showing "Property of Rice University." Each tag shall have a unique number. For purchases less than $5,000 total cost, refer to the Purchasing Card User Manual ( PDF ) on the Payment Solutions website.
Government-Furnished Equipment - Equipment furnished by the Government or excess property requisitioned by a department for use on federally sponsored research shall be controlled as other equipment and identified as U.S. Government property. A copy of the shipping papers transmitting the equipment to the University will be sent to the Property Administrator, along with completed Property Control Registration Form. Government titled equipment will be identified by a tag showing "Property of U.S. Government."
Leased or Rented Equipment - Equipment that is leased or rented by the University, such as computers and data terminals, will not be tagged or inventoried.
Personal Equipment - Equipment owned by University faculty and staff members will not be tagged or inventoried. The University will not be responsible for safeguarding personal equipment.
Surplus Federal Property - Surplus federal property obtained from the Texas Surplus Property Agency (TSPA) is subject to the same definition and control as equipment obtained by other means. Ownership remains with the government and equipment will be tagged as U.S. Government Property until such time as title is transferred to the University. Equipment shall be managed in strict compliance with instructions applicable to equipment received from the TSPA.
Missing Equipment - When equipment becomes missing and is suspected of having been lost or stolen, the chairman or administrative official will notify the Rice Campus Police by letter or email. The letter or email should include the circumstances, inventory control number, descriptions, manufacturer, model number, serial number, campus location, date last seen, and any other information that may be helpful in recovering the item, such as color, size, etc. Correspondence to the Rice Campus Police should be forwarded through the dean or division head, with a copy to the Property Administrator.
Loaned Equipment - Equipment loaned by one department to another remains the responsibility of the lending department and must not be inventoried by the borrowing department. Short term loans that change the location of equipment between buildings need not be reported. Long term loans (30 days or more) will be reported to the Property Administrator.
Non-Movable Equipment - Non-movable equipment attached to and included in the construction of a building will not be inventoried or included in the equipment inventory. Movable office furniture, office equipment, classroom furnishings, and laboratory equipment will be inventoried and tagged. Equipment and furniture purchased subsequent to completion of initial furnishing of a building will also be inventoried and tagged.
Replacement Items - May not be capitalized.
10. What should be done with excess equipment?
Disposal of Excess or Worthless University Property
Department chairmen and administrators are responsible for the effective utilization of University property in their control.
Systematic inspections and inventories must be made to determine that the University retains in the inventory only that property for which there is a present need or for which a real need can be projected.
University property is defined as:
- Equipment purchased or fabricated at a cost equal to or greater than $5,000.
- Equipment received as a gift with an assessed value equal to or greater than $5,000.
- Equipment originally capitalized through construction.
- Equipment from Government funds for which ownership has been transferred to the University.
Property that is in excess of the needs of a department or administrative office must be offered to other University departments or offices before disposal action is taken with an outside source. Disposal may be taken when departments having a similar requirement for the property have indicated no need for the equipment.
Property that is worthless in value, obsolete because of changes in technology, or requiring excessive cost to repair, should be disposed of in the best interest of the University. In doing so, equipment that no longer has a utility within the University may be removed from dead storage and from the inventory and fiscal records of the University.
Questions? Please contact Pat Hall-Jones at extension 3429, Controller's Office / Property Accounting, MS-70, or firstname.lastname@example.org.