Equipment Capitalization Threshold

Equipment purchases are capitalized in the university's general ledger based on a dollar threshold. 

Effective July 1, 2026, the capitalization threshold for equipment purchases will increase to $10,000 from $5,000. For active federal awards with a start date prior to July 1, 2026, however, the current capitalization threshold of $5,000 will continue throughout the duration of the award.

The increase in capitalization threshold, as allowed by recent changes in Uniform Guidance and U-M's current facilities and administrative cost rate agreement, will make the university's ongoing inventory process more efficient, since less equipment will need to be tagged and inventoried. 

For additional information about equipment capitalization, please visit the Financial Operations website or contact Kandie Little, director of accounting operations, at [email protected] or (734) 763-2393. 

In addition, please feel free to forward this message to colleagues who would benefit from this information.

Thank you,

Cheryl Soper
Assistant Vice President for Financial Operations and Controller