Depreciation Guidelines for Recharge Accounts

Expensing the total cost of equipment in the year of purchase is not in accordance with Generally Accepted Accounting Principles (GAAP) which requires the cost of an asset to be spread over its expected useful life. (source: January 12, 1994, DHHS, Office of Inspector General Audit Report)

OMB Circular A-21 allows universities to be compensated for the use of their equipment through depreciation or use allowance. It specifically states that charges for the use of specialized services should be designed to recover not more than the aggregate cost of the services. Including a markup...

Stanley Hall Storeroom

Unit of Measure FY17 Rate Approved FY18 Rate Storeroom Markup Mark Up over cost 8% 8% Dry Ice $/two lb scoop 1.60 1.65

School of Optometry Recharge Rates

Clinical Research Center Unit of Measure FY17 Rates FY18 Rates One-Day Subject Studies $984.53/subject Discontinued Machine Shop Labor $51/hour Discontinued

Functional Genomics Laboratory Recharge Rates

Functional Genomics Laboratory Unit of Measure FY17 Rates Approved FY18 Rates Affymetric Gene Chip Hybridization & Scanning $/chip $64.00 $62.00 Training, Specialized Services & Consulting $/hour $80.00 $78.00 DNA Kit $/sample $8.00 $9.00 DNA Kit (High Sensitivity) $/sample $10.00 $10.00 RNA Kit 6000 Nano $/sample $8.00 $8.00 RNA Kit 6000 Pico $/sample $8.00 $8.00 RNA Kit (Small RNA) $/sample $10.00 $9.00 Equipment Use Axon Scanner $/hour $34...

Financial Aid Office Recharge Rates

Activity Unit of Measure FY17 Rates FY18 Rates Work Study Administration 10% of direct wages TBD

Can you elect to expense a piece of equipment in the year of purchase?

No. The equipment purchased for use in a recharge activity must be charged out to that activity through annual depreciation charges over the useful life of the equipment or financed through a capital lease.

Where do I find funding to purchase equipment for assignment to a recharge activity?

The University operating policies require the department to purchase the initial equipment for the newly established recharge activity. If it is an ongoing recharge activity and the amount of the equipment purchase is small, you can finance the purchase from amounts in the recharge accounts current reserves. If it is an ongoing recharge activity and the amount of the equipment purchase is substantial, you should finance the purchase through a capital lease or seek outside seed money from other sources.

Can a recharge unit assign a piece of existing equipment, purchased with non-federal funds, to the recharge activity and depreciate the value of the equipment over the useful life of the equipment?

If the equipment was originally bought on non-federal funds, you can make the assignment and the subsequent depreciation. If the equipment is used only part of the time for recharge activities and the remainder of the time for non-recharge activities, only that percentage of the equipment time on the recharge activity should be assigned to the recharge unit.

Where can I find information regarding the useful life of a piece of equipment?

The useful life tables are prepared by the Office of the President and can be found at the Useful Live Indices for Equipment Depreciation page. Useful lives can also be found in the campus equipment inventory tracking system, BETS. To request a new classification of equipment with new useful lives, complete the Equipment Useful Life Update Form (Word) and submit to

Can a recharge activity lease a piece of equipment and charge the lease payments to the recharge operating fund?

For capital leases, lease payments can be allocated to the recharge operating fund provided that the amount of the lease payments is roughly equal to the amount of depreciation that could have been charged for the same period and the University has title to the asset. For operational leases, the lease payments should be allocated to the recharge operating fund.