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32.0 - Capital Equipment Purchased for Resale


Capital Equipment Purchased for Resale


Capital Asset Management



August 2010



February 2022




To provide guidelines for equipment purchased for resale.


When capital equipment (costing $5,000 or more) is purchased with the intent to resell the equipment to another university organization, the initial purchase should be made using object code 5323 Equipment for resale on the requisition.

It should be noted that contract and grant accounts are restricted funds and should never be used to purchase equipment for resale.

Labor and installation charges that make an asset ready for its intended use can be capitalized when they are readily identified with the installation of the equipment.

Service costs that can be capitalized with equipment purchases include:

  • Cost of assembling the asset
  • Cost of installation
  • Freight
  • In-transit Insurance
  • Preparing the site and asset for its intended use
  • Training

See CSOP 8.0 Capitalization of Moveable Equipment for more information.


Internal Billing Document



Internal Billing Document

Once the installation of the purchased equipment is complete and the organization is ready to bill the receiving organization, an Internal Billing Document needs to be processed using the appropriate capital object code in the expense section on the Internal Billing Document.  A capital equipment object code should only be used on an Internal Billing document when the original purchase was coded with object code 5323 Equipment for resale.

After the accounting line with the capital object code is added, click the generate button. The Accounting Lines for Capitalization tab will appear.  Check the box to "select line" and click the "create asset" button.  The Create Capital Asset tab will appear requesting the following asset information:

  • Quantity, enter the number of like assets to be created.
  • Vendor, enter the supplier name from the purchase order.
  • Asset type, determine the life of the asset; use the search to find the best value.
  • Manufacturer
  • Model
  • Description, should describe the equipment, detailed description will improve physical inventory.

Click the "add tag/location" button and enter the following:

  • IU tag Number, if tagged already
  • Serial Number
  • Campus, location where the asset will be used.
  • Building, location where the asset will be used.
  • Room, location where the asset will be used.

Click the "redistribute total amount" button.  After document is approved, the document is loaded into the Capital Asset Builder (CAB) until the capital asset office creates the asset.



The UCO organization contracts with the physical plant to purchase and install the projectors that will be mounted to the ceiling.

The requisition to purchase the goods and services will be initiated by Physical Plant using their account number and object code 5323 Equipment for resale.

Internal Billing:
After physical plant installs the projectors, physical plant will bill UCO using the Internal Billing document. The projector will be capitalized at this time by the selection of a capital object code in the expense section of the Internal Billing document. The projector and applicable costs associated with the installation will reside on UCO's account as a capital asset.


Capital Equipment- must have an acquisition value of at least $5,000 and a useful life expectancy of one year or more.

Equipment- The term “equipment” includes delivery equipment, office equipment, machinery, furniture and fixtures, factory equipment and similar fixed assets.

Systems - components that work together to perform one function. These components must be necessary for the system to function as a whole. Removal of any one component would result in the system not operating at the required capacity or for the intended purpose.



CSOP 8.0 Capitalization of Moveable Equipment
Policy FIN-ACC-150 Ownership, Depreciation and Capitalization of University Assets



Organizations that purchase capital equipment for resale.