Is equipment, especially personal computers, considered capital outlay?
If the per unit cost of the personal computer exceeds the LEA’s capitalization threshold, it is accounted for as capital outlay; if the per unit cost is below the capitalization threshold, it is considered materials and supplies, not capital outlay. In general, there are certain criteria that must be met before equipment is considered to be capital outlay. CSAM Procedure 770 lists these criteria, such as whether the item has a normal service life of more than one year, the item is usually repaired rather than replaced, the cost to inventory the item is only a small percentage of the purchase price, and the item’s per unit purchase price exceeds the LEA’s capitalization threshold. CSAM recommends an equipment capitalization threshold of at least $5,000, but this may vary by LEA. Procedure 770 also includes guidance on capitalizing groups of items acquired at the same time that do not meet the threshold for capitalization individually. Equipment that costs more than the inventory thresho
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- Is equipment, especially personal computers, considered capital outlay?
