12.1.11 Report New Software Over $250,000

Policy Statement

Software is capitalized if purchase or development costs are more than $250,000. Units must notify University Property Accounting and Reporting (UPAR) of software purchases or development so it can be entered into Banner Fixed Assets, capitalized, and depreciated over the life of the item.

Reason for the Policy

State regulations and Governmental Accountings Standards require the reporting and capitalization of owned software purchased or developed with a cost of more the $250,000,

Applicability of the Policy

All University of Illinois System owned, purchased and developed, software over $250,000. Licenses paid to use third party software are not considered owned and are not subject this policy.

Procedure

To report new software over $250,000:

1. Complete a Software Capitalization Approval Request form. The form contains a series of questions that will determine whether or not the software meets capitalization criteria.
2. Submit the form.
3. Units that have a large quantity of software purchases each year such as the University of Illinois Medical Center and Administrative and Information Technology Services should provide monthly or quarterly reports to UPAR and work closely with UPAR to ensure all software purchased or developed in house each year is reported accurately and timely in accordance with governmental accounting standards.