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Procedures for Equipment Fabrication

If you plan to build a piece of equipment, please read the “Notes Regarding Equipment Fabrication” and then follow the procedure outlined below.

  1. To initiate a fabrication, the Principal Investigator must fill out a brief “intention-to-build” document. This document will specify a short, descriptive name for the fabrication, a brief description of the equipment to be fabricated, a total cost estimate, a useful life estimate, and a final completion date estimate. In order to qualify for capitalization, the item must have a useful life of at least two years and a completion cost of at least the University’s Capital Equipment limit (currently $5,000).
  2. One copy of the “intention-to-build” document will be maintained by Physics and one copy will be forwarded to Property Accounting.
  3. Upon receipt of the “intention-to-build” document, Property Accounting will assign an asset number (a “PY number”) to the equipment. This asset number will be provided to Physics and should be recorded on their copy of the “intention-to-build” document for that project.
  4. All equipment fabrication expenditures should be coded within the capitalized equipment object code range.
  5. All requisition documents (either purchase requisitions or LPO’s) must clearly indicate the asset number of the fabrication so that the cost can be reflected in the Property System. Fabrication expenditures which are processed without an indication of the assigned number may be changed to object codes which are subject to indirect costs.
  6. Any cost transfers which involve fabrication expenditures (i.e., shop time) must also make clear reference to the appropriate asset number. Physics must forward a copy of all such transfers to Property Accounting when the original is sent to General Accounting.
  7. Property Accounting will reflect the fabrication expenditures from above as the documentation is received. The expenditures will be entered into the Property System under the assigned number until such time as the item is ready to be physically asset tagged.
  8. Physics must notify Property Accounting when a fabrication project has been completed so that the equipment may be physically tagged.

• It is the responsibilty of the PI to ensure that all requests (e.g, purchase orders, machine shop jobs) are marked with the asset (“PY”) number. Without this notation, the transactions will not be coded as equipment and overhead will most likely get charged. The Accounting Office folks cannot “fix” this after the fact.

• It will be the responsibility of Physics to ensure that only legitimate fabrication expenditures be processed under the capitalized equipment object code. It must be recognized that not all expenditures should be capitalized (i.e., those that are clearly for supply items or for supporting equipment which does not exceed the capitalization limit). Only expenditures for those items which will be used to form an integral part of a clearly defined, stand-alone piece of fabricated equipment should be processed as fabrication expenditures. Equipment items which may support or work with a fabricated equipment item must be treated as a separate item of equipment and object coded appropriately according to their cost.