You will notice a change in the natural account associated with the purchase of capitalized equipment. Do not change the account in the chart string.
Capitalized equipment has a useful life over one year and costs $5,000 or more. When you create a requisition for purchase of capitalized equipment, the expenditure type will fill in a natural account that begins with 14xx. In the past this natural account would have begun with 85xx. For example, a golf cart was 8515 and will now be 1442. This is not an error; do not change the account.
IO uses two different accounts for capital equipment transactions, one to capitalize the asset and one to deduct the cost from your budget or fund balance. Property Accounting has always needed to make a behind-the-scenes entry to ensure both accounts are used in a transaction. In the past you started with the expense and they booked the clearing, now you’ll start with the clearing and they will book the expense. The end result is the same. The change is being made to make the capitalization process more efficient and accurate, taking advantage of certain Oracle features. It is important that you do not change the account that IO selects for you.
Please use the capitalizable equipment procurement category/expenditure type for all lines in the requisition associated with the main equipment purchase, including accessories and freight. The only exception is for extended warranties, which you should use the maintenance and service agreements category. Also, the fabrication expenditure type should only be used for fabrication projects.
If you have any questions or concerns, please contact Lisa Smithies or Crystal Davis.
