In making the determination as to proper classification of the various items of nonexpendable property, consideration will be given to such factors as acquisition cost, expected useful life, use, susceptibility to personal uses, cost of possible accountability and/or responsibility records compared with cost of possible increased losses if such records are not maintained, as well as any other factors which may have a bearing on the classification. It will be necessary to use good judgment in applying these factors to individual items since the classification placed on an item will, to a great extent, determine the type of inventory control and accounting records to be maintained therefor.

(a) As a general rule, any single item of equipment costing more than $100 should be capitalized. Classification of any given item of equipment should be consistent; however, in cases where a portion of the inventory of the item is acquired at a cost of $100 or less and a portion at a cost of over $100, the entire stock of a given item should be accounted for as either capitalized or noncapitalized equipment, as the case may be.

(b) Examples of nonexpendable property items which fall under the capitalized equipment classification are: motor vehicles, office machines, surveying instruments, and similar major items of equipment which have a long expected service life and generally represent a major investment in personal property.

(c) Examples of nonexpendable property items which will generally fall under the noncapitalized equipment classification are: small hand tools, and similar relatively low-cost minor items of equipment which are frequently worn out after a comparatively short period of service

(d) Due to a high rate of breakage in service, a normally short service life, or an insignificant value, certain items of property nonexpendable by definition may, at the discretion of the director of material management, be administratively classified as expendable and treated as such in all respects. Examples of items which may be considered as expendable are glassware, tinware, brushes, drill bits, file baskets, pencil sharpeners, and like items which, in the opinion of the director of material management, do not warrant the same measure of control and attention as do those composing the capitalized and noncapitalized classifications.

History: Rule 3-78, eff 17 Apr 78, 300 GASM § 2.3.