For an item to be considered equipment, it must meet all three of the following criteria:

  • Cost $5,000 or more
  • Have a useful life of at least one year
  • Be stand-alone and function independently

Some replacement parts and fabricated equipment are treated as exceptions to the standard definition of equipment. Consult agency guidelines for additional information. Anything that does not meet the criteria for equipment should be budgeted in the supplies category.

If a project recovers indirect costs at the appropriate negotiated rate, e.g., 38 percent of modified total direct costs (MTDC) for on campus research and development projects, equipment is excluded from the MTDC base and from indirect charges. If the sponsor pays less than the appropriate negotiated rate, then the indirect rate is applied to all costs, including equipment (unless specifically prohibited by sponsor policy).