Capital Equipment Threshold Increasing to $10,000

From $5,000 to $10,000

Beginning July 1, 2026, UVAFinance will increase the dollar threshold used to define Capital Equipment from $5,000 to $10,000. The Equipment Trust Fund (ETF) threshold will also increase to $10,000, aligning the two standards. 

This update reflects changes in purchasing costs over time and helps ensure that capital accounting practices remain practical and consistent across the University. 

What Qualifies as Capital Equipment? 

With the updated threshold in place, an asset must meet all of the following criteria to be classified as Capital Equipment: 

• Cost of $10,000 or more: The total cost of the asset must meet or exceed the new $10,000 threshold. 
• Useful life greater than one year: The asset must be expected to remain in service for more than one year. 
• Functionality: The asset must be: 
• Functional on its own, or 
• Functional as part of a larger, identifiable functional unit. 
• Purchased as a unit: The asset must be purchased from a supplier as a complete unit. Exception: Assets that are approved in advance as a fabrication may be constructed from multiple components. 

Assets that do not meet all of these requirements will continue to be treated as non-capital equipment. 

What’s Not Changing 

While the dollar threshold is increasing, the underlying principles of capitalization remain the same. Reviews for useful life, functionality, and purchasing structure will continue to play a key role in determining how equipment is classified and recorded. 

Planning Ahead 

Departments planning equipment purchases for FY27 and beyond should take note of the new threshold when budgeting, purchasing, and preparing for asset review. Additional guidance and updated resources will be shared as we approach the July 1, 2026 effective date. 

Questions? The Accounting and Financial Reporting team is happy to help clarify how this change may apply to specific purchases.  Contact us at askfinance@virginia.edu