Handbook AS-701 Revision: Increasing Capital Threshold

Effective October 1, 2013, Handbook AS-701, Material Management, is revised to reflect an increase in the capital threshold amount for property and equipment.

Handbook AS-701, Material Management

5 Asset Accountability

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51 Definitions

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512 Capital Property

[Revise text of 512(c) to read as follows:]

c. Unit cost is $10,000 or more.***

513 Expendable Property

[Revise text of 513 to read as follows:]

Expendable property includes items costing less than $10,000. Repair parts, replacement components (e.g., motors, compressors), most mail transport equipment, workroom furniture, and the like, regardless of cost, are also expendable property. The costs of these items are charged to an expense account and are not depreciated.

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57 San Mateo ASC Documents

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[Revise title and text of 573 to read as follows:]

573 Capitalized Modifications

Expenditures for modifications are capitalized when:

a. The cost is at least 50 percent of the capitalization criteria (50% x $10,000 = $5,000).

b. The productive capacity or operating efficiency of the equipment is materially increased.

c. The life of the equipment is significantly extended.

d. The modification adapts the equipment to a different use.

[Delete sections 573.1, 573.2, 573.3, 573.4, 573.5, 573.6, and 573.61.]

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Appendix B Glossary

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Capital property

[Revise definition of Capital property to read as follows:]

Items that are acquired through purchase, transfer, or donation, and that meet each of the following criteria: (a) have a service life of more than one year; (b) are capable of being identified as a standalone item of property throughout their useful life; (c) have an assigned value of $10,000 or more.

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Expendable material

[Revise definition of Expendable material to read as follows:]

Expendable refers to items that are not classified as capital property and are generally consumed over their service life. This includes items costing less than $10,000, repair parts, most mail transport equipment, and workroom furniture regardless of cost. The costs of these items are charged to an expense account and are not depreciated.

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We will incorporate these revisions into the next online edition of Handbook AS-701, Material Management, on the Postal Service PolicyNet website:

n Go to http://blue.usps.gov.

n Under “Essential Links” in the left-hand column, click PolicyNet.

n On the PolicyNet page, click HBKs.

(The direct URL for the Postal Service PolicyNet website is http://blue.usps.gov/cpim.)