12.2 Definition of Equipment
The Federal Government defines equipment as an item of non-expendable, tangible personal property, having a useful life of more than one year and an acquisition cost which equals or exceeds the lesser of the capitalization level established by the recipient organization for financial statement purposes, or $5,000. Since the University's definition of equipment must conform to the federal government definition, it has established a capitalization level of $5,000 and a useful life of more than one year (including fabricated equipment) for all departments. Purchased and internally developed software have capitalization thresholds of $500,000 as set by the State of Iowa in compliance with updated accounting standards.
For assets that are funded by more than one funding source, the asset will be capitalized and depreciated based on the total cost basis.
Each item of equipment acquired will be assigned a serially numbered University tag. Non-capitalized items (valued at less than the appropriate University threshold) may be identified with an unnumbered tag furnished by Capital Assets Management. These tags will be marked "Property of The University of Iowa." University equipment that is federally titled must also be tagged with a government label that indicates federal ownership and the applicable federal agency.