To fall into the specialised equipment category the asset has to fulfil certain criteria such as a bespoke purchase, an item that has been built to our specific requirements and not an ‘off the shelf’ item. It also has to be over £50k and have a provable economic life of more than 5 years.
An example could be a microscope; the vast majority of microscopes purchased by the University do not get classed as a specialised asset, however we have purchased highly technical microscopes that have been configured to our own specific requirements and these can come with a high cost and technology that lasts for decades and so these can be classed as specialised equipment. This is just one example given as a general guide for department’s to start considering if the item could be specialised and to start a conversation with the Fixed Asset Team to explore if it can be. This conversation should take place before an item is budgeted for using anything but the standard 5 year depreciation life as the vast majority of equipment assets do not meet the requirement to be classed as a specialised asset, we currently have less than 0.01% of assets in this category.
Specialised items do not automatically get a life of 10 years, it can be anything between 5-10 years and the life will always be based on the real economic life of the asset. This means how long it has an economic value for, could we sell it at 9 years and recover a percentage of the original cost, not how long we can use it for before it stops working or we have to replace the item.
The economic life needs to be proven as all specialised assets are audited at year end by the external auditors and so we have to provide evidence as to why we believe it has a longer than 5 year life and are classing it as a specialised item. In the past we have used manufacturer evidence or a document proving a residual value after 5 years such as us selling the existing item we may be replacing, or by showing someone else has/is selling a similar item with a similar age.
For further information please contact the Fixed Asset Team.
For guidance on departmental depreciation for internal funded assets, please see Departmental Additions and Depreciation and:
Guidance on Departmental Asset Additions Depreciation