University of Minnesota  Procedure

Capital Equipment Disposals: Selling Capital Equipment Assets to External Entities or Employees


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Please use the contact section in the governing policy.

Selling Capital Equipment External to Entities or Employees

Departments can sell capital equipment assets that were purchased with non-sponsored or sponsored funds to external entities or employees.  The accounting for the transaction is dependent on the source of the funds, status of the project and the type of disposal.  The University must have title to the asset before it can be sold.  Accounting Services can verify the University has title to the equipment.  Contact Accounting Services at [email protected] for assistance in determining ownership.

Selling Capital Equipment Assets that were Purchased with Sponsored Funds

Departments can sell capital equipment assets that were purchased with sponsored funds; however only when the capital equipment is no longer needed for the original project or program. Prior to selling, the department must use the equipment in connection with other federally-sponsored activities, in the following order of priority: (1) activities sponsored by the federal awarding agency which funded the original project, then (2) activities sponsored by other federal awarding agencies. If such activities don’t exist, the department can sell the capital equipment.

Departments must:

  1. Be good stewards of University property to ensure the Fair Market Value (FMV) or selling price is appropriate.
    • Determine the net book value (NBV) by using the existing asset management reports in the Reporting Center or by a query in the EFS Asset Management module.
    • For assistance in determining the NBV or ownership, please contact Accounting Services at [email protected]
    • The asset should be sold at Fair Market Value. Determine FMV by obtaining an official appraisal or comparable price information from three different external sources (EBAY, Vendor, etc.) in writing (print screen is acceptable).
    • Determine if sales tax should be added to the sale price.
      1. The sales tax rate should be based on where the sale occurs or where the title of the item transfers.  Questions on sales tax may be directed to [email protected] or 612-624-1053.
  2. Complete form UM 1393: Capital Equipment Asset Disposal (PDF) form from the Forms Library.
  3. Forward the form to Accounting Services at [email protected].
    • Dean, department head, or administrator's signature is required on this form. Approval authorization can be delegated based on the President’s Delegations of Authority Program:  FN02 - External sales of good and services.
  4. Accounting Services will review the form to ensure the University has title to the asset.
  5. If Accounting Services authorizes the disposal, an approved copy will be sent back to the submitting department.
    • The disposal cannot occur if it has not been approved by Accounting Services.
  6. When the approved copy is received by the department, the property may be sold to the buyer.
    • The capital equipment asset tag should be removed before the item leaves the University premises.
  7. The Department must create an invoice to the buyer for the amount of the sale, if the payment does not occur immediately at the point of sale.
  8. The buyer should pay the department with a check made out to "University of Minnesota."
  9. The buyer must sign a receipt for the property. The receipt must be retained by the department, along with the approved UM 1393: Capital Equipment Asset Disposal form.
  10. Accounting Services will make the appropriate adjustments in the EFS Asset Management module.

Accounting for the Transaction

All sales must follow Steps 1-10 above.  Once those have been completed, the department must complete the following:

Capital equipment assets purchased with non-sponsored funds:

The check should be deposited into a non-sponsored departmental chartstring using Accounts Receivable Administrative Policy: Accepting and Depositing University Revenue. The deposit must be coded to account 850103.

Capital equipment assets purchased with sponsored funds:

Refer to the following capital equipment procedures based on the source of funding:

  • Capital Equipment Disposals: Selling Capital Equipment Purchased with Sponsored Funds from NSF Grants, NIH Grants or Non-Federal Grants
  • Capital Equipment Disposals: Selling Capital Equipment Purchased with Sponsored Funds (does not include NSF Grants, NIH Grants, and Non-Federal Grants)

Vehicle Sales:

If a department wishes to sell a vehicle for which Fleet Services holds title:

  • They must contact the director of Fleet Services 612-625-8020 to assist with the title transfer
  • If selling a vehicle (any car, truck, trailer, or licensed vehicle, except boats), an auction sale may be coordinated through Fleet Services, or a department may negotiate a sale.