Equipment costs and depreciation rules for EC grants

Under University policy, any piece of equipment costing over £30,000 needs to be ‘depreciated’.

The EC does not pay for the full cost of the equipment in a lump sum – it only pays for the depreciated value of the equipment over the period of the grant. 

This means that only the portion of the equipment’s cost that corresponds to its actual use, starting from the date it was brought into use, can be considered.

Departments must keep records of the equipment’s full price, and usage logs or an asset overview table recording its use on the project and the date it was brought into use.

If the price of the equipment is between £5,000 and £30,000, it is considered low value. Its full price can be claimed, provided it is used exclusively for the grant. This means it does not need to be depreciated and can be included in your accounts during the year you bought it.
 

Calculating depreciation

Depreciation is calculated over 4 years at 25% each year – known as the ‘straight-line method’. It starts from the date you brought the equipment into use.

This means:

• if you buy equipment costing £30,000 or more towards the end of a grant, you’ll only be able to claim a portion of the cost
• if you buy equipment costing £30,000 or more at the start of a 3-year grant, you’ll only be able to claim 75% of the costs

Equipment with multiple components

If you buy multiple components that cost less than £30,000 and use them to build a single piece of equipment worth more than £30,000, this needs to be depreciated.

Find out more

You can get more information about depreciation in the Financial Procedures Manual.