Louisiana Administrative Code
Title 28 - EDUCATION
Part XLI - Bulletin 1929-Louisiana Accounting and Uniform Governmental Handbook
Chapter 11 - Classification of Balance Sheet Accounts
Section XLI-1107 - Definition-Supplies vs. Equipment

Universal Citation: LA Admin Code XLI-1107

Current through Register Vol. 50, No. 9, September 20, 2024

A. An LEA can take two basic approaches to distinguish between supplies and equipment in the decision making situations: adopt a predetermined list of items, classifying each entry as either a supply or an item of equipment, or adopt a set of criteria to be used in making its own classification of supply and equipment items.

1. List of Items-At one time, the Federal Accounting Handbook contained lists of both supplies and equipment. Such lists can never be comprehensive or exhaustive, and quickly become outdated.

2. Set of Criteria-An item must be considered a supply if it does not meet all the stated equipment criteria listed below.
a. It can be expected to serve its principal purpose for at least one year.

b. It is nonexpendable; that is, if damaged or worn out, it can be repaired without being replaced.

c. It does not lose its identity through fabrication or incorporation into a different or more complex unit.

d. It is equal to or greater than $5,000 per unit cost in value. (The increase of the property threshold amount to $5,000 was advertised in the Louisiana Register and adopted as rule in the April 20, 2008 issue.)

NOTE: The unit cost of $5,000 does not apply to any program funded with 8g monies.

3. Food is always considered a supply. Software costs that are below the district's capitalization threshold should be coded to supplies. Expenditures for software that exceed the district's capitalization threshold should be coded to equipment.

B. School districts maintain rigorous accountability for their property whether it is capitalized or not. For accountability and internal control purposes, many items of property that do not meet the districts' capitalization threshold must be inventoried. Thus, the Department of Education recommends maintaining inventory and tracking items that do not meet the equipment criteria if needed for insurance purposes and/or the item has "street value." For instance, districts might inventory DVD players and computers for internal control purposes but not capitalize them due to their low cost.

AUTHORITY NOTE: Promulgated in accordance with R.S. 17:6(A)(10).

Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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