Capital equipment, also referred to as property, is equipment or material which meets certain qualifying criteria. Equipment can be purchased, fabricated, leased, loaned or donated. Sponsor-owned or sponsor-provided equipment (regardless of cost), as well as vehicles, are included. Depending on the acquisition method and the ownership, an asset may be depreciated over a period of time.
Definitions and Types of Capital Equipment
For equipment to be considered capital equipment, it must meet all of the following criteria:
- The acquisition cost or value must equal or exceed $5,000.
- The useful life must be more than one year.
- It must be a tangible item that is stand-alone and moveable.
- It is software with a value of $1 million dollars or greater.
For additional information, please visit the Office of Research Administration Property Management Manual, Chapter 1.1-Overview.
Property Management Office (PMO)
The Property Management Office (PMO) is responsible for property (capital assets) administration as well as the disposition and/or reuse of non-capital furniture and equipment. PMO implements property management policy, procedures, online systems and training to maintain an effective, compliant asset life cycle property system.
PMO provides guidance to departments, faculty and staff regarding issues related to property administration and physical inventory. PMO manages the physical inventory of capital and sponsor-owned assets and also runs the university surplus sales and reuse programs. They are the liaison with property auditors. Learn more about PMO’s role in property administration and contact information.
Department Property Administrators (DPAs)
DPAs oversee and perform day-to-day management responsibilities for property within their designated areas. One key responsibility includes identifying, tagging and recording incoming assets within 30 days of receipt. Additionally DPAs provide guidance to department personnel concerning property matters, such as acquisition, coordination of transfers, equipment custody, asset maintenance, physical inventory and disposal. DPAs are their organization’s liaison with PMO on property related issues. To identify the department’s local DPA, use the DPA Directory in SPARC.
PMO's Property Manual, Chapter 1.2, Roles and Responsibilities further discusses these and other roles.
Purchasing is the most common method of acquiring property at Stanford University. Requisitions for property are initiated in the iProcurement application within Oracle Financials. Capital equipment may not be purchased with a PCard or reimbursed through the Expense Requests System. Other methods of acquiring capital equipment include equipment leases, donations, loans, incoming transfers from another institution, fabrication and sponsor-furnished property. For more details, refer to Property Management Manual, Chapter 2, Acquisition. If the department wants to compare the cost of purchasing with an internal loan versus pursuing a lease option, use the Lease vs. Buy analysis spreadsheet.
Specific information on purchasing capital equipment can be found within the Property Management Manual, Chapter 2.3, Purchases.
Standard Capital Equipment Orders
Requesters can create a Non-Catalog Purchase Requisition, using the Standard Capital Equipment requisition type. Refer to How To: Create a Standard Non-Catalog Requisition for more information.
- When creating the purchase requisition, certain elements of the acquisition cost (the cost incurred for the initial purchase) should be included in the capital equipment cost basis and should use the appropriate capital equipment expenditure type. For expenses that are not allowed in the cost basis, they should be coded with a non-capital equipment expenditure type. For more details, refer to Property Management Manual, Chapter 2.2, Accounting.
- Standard Capital Equipment requisitions are created and routed by the requester for approval. The DPA must be included as an approver on the routing list and should be the first approver.
Changes to a Capital Equipment Purchase Order (PO) must be made using the Standard Non-Catalog Change Order-Capital template (not the Standard Change Order category).
SmartMart Capital Equipment Orders
- SmartMart capital equipment orders are placed immediately with the supplier after the DPA and financial approvers have approved the requisition.
- Invoices are electronically transferred by the supplier to Accounts Payable for processing. SmartMart Catalog Suppliers orders do not route to central Purchasing for requisition approval and do not require competitive quotes or backup documentation.
- Refer to How To: Order Capital Equipment through SmartMart for more information.
Receiving includes the process of accepting delivery of equipment or materials into Stanford University. It is the point at which custody, responsibility, accountability and liability for the property begins.
Department records the receiving of capital equipment in iProcurement. Timely receiving for all capital equipment is required and is completed using the Receiving tab in Oracle iProcurement. Refer to Receiving Goods and Correcting Receiving for more information.
Tagging and Recording in Sunflower
Once capital equipment has been received, it needs to be identified and tagged with a unique barcode, recorded in Sunflower and tracked throughout its useful life at Stanford. The Sunflower (SFA) database is used by department property administrators (DPAs) and the Property Management Office (PMO) to create and maintain asset records for the accountability, tracking, physical inventory and disposal of property. The definition of controlled property, which includes capital equipment, can be found at Property Management Manual, Chapter 1.1, Section 6: Controlled Property.
All university-owned capital equipment, as well as all government and sponsor-owned equipment and material must be tagged with a Stanford Barcode Tag and entered into the SFA database within 30 days of receipt. For additional information, please visit the Property Management Manual, Chapter 3.2: Identification.
Financial and Inventory Control Systems
The following online systems, working in conjunction with each other, make up the “official” property record.
- Sunflower Database: Stanford’s official system of record of property is used by DPAs and the Property Management Office (PMO) to create and maintain equipment and material. Includes accountability, tracking, physical inventory and disposal information for property. The current location of equipment must be reflected in the SFA record. See section below for guidance on moving capital equipment.
- Grants Accounting: This system is used by DPAs and PMO to track fabrications while they are still a work in process.
- Oracle Fixed Assets: This system is used by the Capital Accounting team staff to calculate and track equipment depreciation and university accounting. It is also used by the Property Management Office to create the financial records of purchased capital equipment.
For additional information, please visit the Property Management Manual, Chapter 1.1, Section 4: Official Systems of Record.
Equipment Fabrications
An equipment fabrication is the building of a unique individual piece of equipment, or scientific instrument by Stanford personnel (not a vendor or subcontractor). The process involves a request, followed by PMO review and approval. On a case by case basis P-Card use may be allowed for the procurement of associated fabrication components. Please visit Property Management Manual, Chapter 2.6 Fabrications for qualifying criteria and other fabrication information. Equipment Fabrication Request and Equipment Fabrications Completion forms are also available on the PMO website.
Departments should never create or set up an equipment fabrication PTA without PMO approval.
A physical inventory is performed in accordance with university policy and sponsor compliance requirements. At a minimum, the process includes a physical sighting or other approved method of verification to confirm the existence, location, department, project accountability and use status of equipment. In general, inventory results are indicators of the overall effectiveness and level of compliance with property management processes and controls. Inventory results confirm the accuracy of the property records and are used as the basis for financial, stewardship and compliance reporting.
A campus-wide inventory is performed on a biennial basis; more frequent inventory events may occur depending on the terms and conditions of the accountable sponsored project or other identified risk. For additional information, please visit the Property Management Manual, Chapter 3.4: Physical Inventory.
Capital transaction adjustments include changes such as reclassifying a transaction from capital to non-capital, non-capital to capital, changing PTAs or correcting expenditure types. Capital transaction adjustments require Property Management Office (PMO) approval and are processed as a capital cost transfer (CCT) through SPARC. The CCT allows for the collection of the necessary supporting information in order to centrally process a change or adjustment, as described in Administrative Guide Policy 3.2.2: Cost Transfers. For an overview and instruction on how to create and approve a Capital Cost Transfer in SPARC, register and complete PMO-5010: Capital Cost Transfer Overview self-paced training in STARS. Learn more on the Stanford Office of Research Administration website.
At Stanford, capital assets are not owned by individual departments or personally by staff, but by the university as a whole and are held in a central asset fund. While there is an expenditure from the purchasing fund, it is not an expense to the university; rather, it is the purchase of an asset.
The treatment of capital assets in the university’s expenditure and fund reports is explained in the job aid Capital Expenditures on Expenditure and Fund Reports.
Movement of Capital Equipment
The current location of equipment must be reflected in the Sunflower Assets (SFA) record. University activities often require frequent changes in the location of equipment. The duration of the move determines whether it is temporary or permanent, as specified below:
- Less than thirty (30) days is considered a temporary move and the use of a local sign-out notification process is sufficient documentation.
- Exceeding (30) days is considered permanent and the Sunflower record must be updated to reflect the change.
Please contact your Department Property Administrator or PMO for equipment being moved to an off campus location. Assets located off campus could be considered a Loan or in some cases an Off Campus Asset. Additional information on loans can be found by visiting the Property Management Manual, Chapter 2.4 Loans, Transfers, Leases and Rentals. Movement of equipment outside of the state or continental U.S. may require export control documentation. Refer to Stanford’s Export Control website for additional information.
Refer to Property Management Manual, Chapter 3.5 Use, Maintenance, Storage, and Movement for more information.
Transferring Capital Equipment
Equipment may need to be transferred to Stanford or out to other institutions for a variety of reasons. Most often, it is associated with an outgoing faculty member (principal investigator) transferring to another university or nonprofit research institution. Incoming transfers of equipment are also common. Please contact PMO as soon as a transfer is being contemplated to ensure ample review can be performed regarding potential conflicts involving ownership, use restrictions, or other issues. Reutilization within the University should be a priority before an outgoing transfer is approved. If equipment is transferred with any cost Surplus Property Sales (SPS) is the only entity authorized by the University Board of Trustees to sell university property. PMO will work with the department and SPS to set the fair market value.
The designated Property Program Manager will be happy to assist with additional guidance and information as needed.
Disposition is the process by which property owned by or otherwise accountable to Stanford is permanently removed from active university records. When assets become excess to the needs of the university, or the sponsored project under which they were acquired, they must be declared excess and the disposition process initiated. For specific information on Excess, including property re-use, transfers or sales, refer to the Property Management Manual, Chapter 4: Excess. Additional information can be found by visiting PMO Disposals: Surplus Property.
Disposal or Replacement: End-User Computers, Tablets and Phones
Computers and computing devices (tablets, smart phones, etc.) require special handling due to the data compliance risks involved. Please visit Device Disposals: Desktop and Laptop Computers for more information.
