UAB campus-only received board approval to increase the equipment capitalization threshold from $5,000 to $10,000. This change is in conjunction with the new Facilities and Administrative (F&A) rate agreement that was signed in June of this year. Below are some key points regarding this change: 

• For all awards beginning 10/1/2025 and later, equipment, defined as an article of nonexpendable, tangible personal property having a useful life of more than one year(s) and an acquisition cost of $10,000 or more per unit.

• This change will be applied prospectively, meaning previously purchased assets with an acquisition cost between $5,000 (previous capitalization threshold) and $9,999 will continue to be depreciated.

• For awards prior to 10/1/2025, a new object code has been created (8208097 – NonCap Gap for Grants Equip) and must be used for all sponsored project purchases on noncapital equipment items costing in the range between $5,000 and $9,999 (NOTE: this is only for existing awards in FY 2026). This cost must be consistently isolated for purposes of excluding it from the indirect cost expense calculations.

• The capitalization policy and threshold for UAB Hospital remains unchanged and is not impacted by this increase.

Changes have been implemented, beginning with awards on or after October 1, 2025, increasing the threshold for including subcontract costs in the Modified Total Direct Costs (MTDC) calculation from $25,000 to $50,000. Two new object codes have been created to capture these costs.

Agreements awarded prior to October 1^st, will still be capped at the $25,000 threshold.

We have been working to establish an object code related to tariffs. We are anticipating that at some point, we will be requested to provide the financial impact that tariffs have on the institution. While not all invoices/quotes, etc. provide this breakdown and we acknowledge that some tariffs surcharges may be indeterminable; however, when itemized, departments should use the new object to record this expense.

The tariffs object code 8705075 is now available in Oracle for the breakout of foreign tariff surcharges. This object code is available in PO Requisitions, PCARD, and the following Payment Request types:

• Construction Contract Payments
• Disbursement Requisition – All Other
• Other Shipping/Postage
• Photocopy Services
• Repairs and Maintenance
• Subscriptions and Books
• Supplies and Merchandise