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Fabricated Equipment

Fabricated Equipment

What is Fabricated Equipment?

Fabricated equipment is defined as scientific or other complex equipment comprised of a number of individual components that are fabricated/built into a single functional unit. Fabricated equipment is capitalized as a single asset for a combined total cost in excess of $5,000 and a useful life greater than one year. All components must function as a singular unit and will be collectively disposed of at the end of the life of the equipment. Individual components cannot be used independently of the remaining pieces of fabricated equipment and cannot function separately apart from the fabricated unit to which it is attached.

  • If fabrication of equipment at Boise State is anticipated, a cost estimate of the completed equipment should be developed based on required materials and components.
  • Only materials purchased to create the equipment and external services provided (shipping, delivery and installation) will be capitalized. Departmental labor is excluded from the cost to build fabricated equipment.
  • Characteristics of fabricated equipment:
    • Unique, specialized equipment
    • Not commercially available
    • Useful life of more than one year
    • Aggregate cost of materials and services is $5,000 or more
    • May require sponsor approval
    • When completed, the asset will remain and be used within the confines of Boise State’s facilities
  • If funded using sponsored funds or a mix of sponsored and non-sponsored funds, the asset must be completed within the budget dates of the sponsored agreement.
  • If not funded with sponsored funds, must be completed within a reasonable time frame subject to review by the Controller.
  • Fabricated items delivered to sponsors or sponsor-directed third parties before it has been used in place at Boise State for at least one year will not be considered Capital Equipment. Instead the items will be coded as operation expense and may incur F&A.

What is not Fabricated Equipment and, therefore, does not qualify as a capital asset?

  • Standard items that are altered or customized to make them usable on a sponsored project do not qualify as fabricated equipment.
  • Connecting components together in a system (physically or virtually) does not constitute an equipment fabrication e.g., when individual computers and servers are joined to create a network.
  • Components greater than $5,000 which are not physically attached or can function independently should be considered stand-alone capital equipment. These items that are less than $5,000 should be expensed.
  • A sponsored project that is for the purpose of constructing experimental equipment does not characterize fabricated equipment and does not qualify as a capital asset.
  • Prototypes, equipment built for educational purposes and equipment built for resale do not qualify as capital assets.

If audited, departments must be able to justify the capitalization of fabricated equipment.

Please note: If a computer is purchased because it is required to run complex scientific equipment and the fabricated equipment cannot function without it, the computer can be capitalized as part of the fabricated equipment. However, the computer MUST be used strictly for that fabricated equipment and cannot be used in any other capacity.

If you are building fabricated equipment, please let Fixed Assets know by email:

Include a description of what you are building, whether it is grant-funded or not, an estimated completion cost, an estimated completion date, and the user/departmental contact.