Does your unit purchase equipment? If so, it is important to determine whether the purchase is an outright purchase or a financed purchase. This determination helps ensure that the purchase is coded properly for financial reporting purposes.
See below for further details about outright equipment purchases and financed equipment purchases:
Outright Equipment Purchase
- Equipment is purchased with a cash payment from the University of Illinois System at the time of procurement, with ownership immediately transferring to the system.
- In addition, there are no outstanding liabilities, and no remaining payments need to be made after the initial purchase.
- Outright equipment purchases also include scenarios where required prepayments and/or partial payments are made to vendors for equipment manufactured to system specifications.
- Outright equipment purchases must be coded to the appropriate account code, as described below:
- An account code in the 127nnn range must be used for equipment with a cost between $2,500 - $4,999.
- An account code in the 163nnn range must be used for equipment with a cost of $5,000 or more.
- An account code in the 126nnn range must be used for equipment with a cost between $100 - $2,499.
- An account code in the 121nnn, 122nnn, or 124nnn range must be used for consumable supplies, regardless of dollar value, and for equipment with a cost below $100.
Financed Equipment Purchase
- Equipment is purchased via installment payments over a defined term (which typically span multiple fiscal years).
- The purchase must be routed through the applicable Purchasing division to ensure that the financing and payment schedules are properly determined.
- True ownership of the equipment does not transfer to the system until all installment payments are made and until the liability is cleared.
- These types of purchases must be coded to an account code in the 169nnn range.
Contact
If you have further questions on this topic, feel free to reach out to the applicable subject matter expert under Equipment Management Who To Ask list or within the UAFR Who To Ask list.
