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.