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Business and Financial Policies and Procedures

12.1.2 Classify Equipment and Property

Policy Statement

Classifying property is an important first step of many Property Accounting procedures. However, placing a value on the property may need to be done simultaneously. The University of Illinois System adds equipment to inventory that, in general, has a useful life of more than one year and a unit value equal to or greater than $2,500. 

All firearms, antiques, and items of historic treasure must be inventoried and tracked as controlled equipment regardless of cost.


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To classify equipment and property:

Review the information below to determine the classification of your equipment. Click on a link to open or close it:

  Movable Equipment

All movable equipment has all these attributes:

  • A physical object.
  • A useful life expectancy of a year or more (items used up or consumed within a year are considered supplies).
  • Permanent possession by the system; can be on a financed purchase where the system retains ownership at the end of the agreement. It does not include leases, in which owneship does not transfer at the end of the agreement.
  • Not part of a collection.
  • Movable, not permanently attached to a building or grounds as fixed equipment or an improvement other than buildings.
  • Not a "small" animal used for research and experimental purposes.
  • Includes livestock that is purchased or donated. Excludes livestock raised in the system herds.

Non-controlled equipment (does not need a PTag):

  • Costs less than $2,500 (firearms, antiques, and items of historical value are considered controlled equipment regardless of cost)
  • Not tracked in FABweb and Banner Fixed Assets
  • Not tracked in the biennial inventory

Controlled, but non-capitalized equipment:

  • Costs $2,500 to $4,999 (firearms, antiques, and items of historical value are considered controlled equipment regardless of cost)
  • Tracked in FABweb and Banner Fixed Assets
  • Tracked in the biennial inventory

Controlled capitalized equipment:

  • A unit value of $5,000 or more
  • Tracked in FABweb and Banner Fixed Assets
  • Tracked in the biennial inventory


Office equipment
office chairs, computers, conference tables, projectors

Scientific equipment
microscopes, spectrometers

Medical equipment
hospital beds, incubators


Collections are objects held and preserved as a group primarily for education, research, and/or public exhibition. There are two general types of collections: exhaustible and inexhaustible. Exhaustible items are "used up" so they are capitalized and depreciated. Inexhaustible items are maintained indefinitely so they are capitalized, but not depreciated.


Museum Collections (inexhaustible)
Objects held as a group with the intent of preserving them indefinitely primarily for education, research, and/or public exhibition and are considered inexhaustible in nature.

Library Collections (exhaustible)
Books, bound periodicals, and other library materials, purchased or donated.

Costume Collections (exhaustible)
Attire specially constructed or acquired for use in the performing arts.

Auxiliary Unit Equipment (exhaustible)
A unit collection of hand-held tools kept as a group because of their low individual value.

  Intangible Assets

Intangible Assets:

  • Not a physical object
  • Not a financial instrument
  • Life expectancy of a year or more

Intangible assets include software, easements, and intellectual property.

Programming code used to operate computer systems. Large software systems such as Banner and patient records systems developed or purchased to meet the system internal needs (not for resale). Must be over $250,000 to be included in Banner Fixed Assets and capitalized.

A right to use a part of land which is owned by another person or organization.

Intellectual Property
Trademarks – Word or mark that distinctly indicates the ownership of a product or service, legally reserved for the exclusive use of the owner
Copyrights – Exclusive legal right to reproduce, publish, sell, or distribute the matter and form of something (literary, musical, or artistic work)
Patents – Legal right to produce and sell an invention

  Real Property

Real property refers to land and land improvements, buildings, and permanently attached equipment.

Land is non-expendable (inexhaustible), unimproved, real property that represents ground to which the system holds title. It is identified by the tract or parcel contained in the legal description.

Improvements Other than Buildings
Improvements other than buildings include site improvements and infrastructure. Exhaustible modifications to land (other than buildings) that add to land value or adapt it to a new use or improve its functionality and usability.

Site improvements – Work done for a particular site such as landscaping, fencing, parking lots, athletic fields, access roads, etc. Can include the cost of removal, relocation, or reconstruction of property belonging to others (railroads, telephone, and power lines)

Infrastructure – Basic physical and organizational structures needed for the operation of an enterprise: roads, water supply, sewers, power grids, telecommunications, lighting systems attached to infrastructure items, etc.

Permanent, enclosed structures to house persons or property

New Buildings (Four Standard Components)

Building shell – The building shell includes all design and construction.
Building Service Systems – Includes air-conditioning systems, heating systems, ventilation systems, plumbing systems, electrical and telecommunication wiring and fixtures, elevator systems, etc.
Fixed Equipment – Equipment that cannot be removed from the building without significant physical effort, technical expertise, or costly or extensive repairs or alterations to make the space usable for other purposes. Fixed equipment includes all permanently attached equipment, machinery, and other furnishings that are not integral to another component and cannot be removed without rewiring; cutting into walls, ceilings, or floors; or otherwise damaging the buildings or the items being removed. Examples of fixed equipment include sterilizers, casework, fume hoods, cold rooms, and glassware washers.

Incorporated Artwork – Works of art incorporated into a building for purely aesthetic, non-functional purposes are recorded as a separate component of the structure. This includes statuary, murals, and similar stationary works.

Established Buildings
Repairs and Maintenance – Work performed to keep or restore an asset to normal operating condition from normal wear and tear. Includes painting walls, replacing carpet, replacing lighting fixtures, woodwork repair, etc. Repair and maintenance activities are performed to obtain the expected service life of an asset. Maintenance on a regular basis keeps an asset in normal or expected operating condition.


Renovation/Remodeling – Alters the appearance and/or internal configuration of an existing structure without altering its structural "footprint" (foundation/number of floors, gross square footage). Renovation significantly increases the usefulness or service life of a building. Includes any change in the intended use of an area such as converting a classroom into office space.

Replacement – Replaces property that has been damaged or outlived its useful life.

First Published: June 2011 | Last Updated: March 2023 | Last Reviewed: March 2023

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