---
kind: "section"
citation: "2 C.F.R. § 200.439"
title: "2"
number: "200.439"
heading: "Equipment and other capital expenditures."
url: "https://uscodex.org/cfr/2/200.439"
---

# §200.439. Equipment and other capital expenditures.

- (a) See [§ 200.1](/cfr/2/200.1.md) for the definitions of capital expenditures, equipment, special purpose equipment, general purpose equipment, acquisition cost, and capital assets.
- (b) The following rules of allowability must apply to equipment and other capital expenditures:
  - (1) Capital expenditures for general purpose equipment, buildings, and land are allowable as direct costs, but only with the prior written approval of the Federal agency or pass-through entity.
  - (2) Capital expenditures for special purpose equipment are allowable as direct costs, provided that items with a unit cost of $10,000 or more have the prior written approval of the Federal agency or pass-through entity.
  - (3) Capital expenditures for improvements to land, buildings, or equipment that materially increase their value or useful life are allowable as a direct cost, but only with the prior written approval of the Federal agency or pass-through entity. See [§ 200.436](/cfr/2/200.436.md) on the allowability of depreciation on buildings, capital improvements, and equipment. See [§ 200.465](/cfr/2/200.465.md) on the allowability of real property and equipment rental costs.
  - (4) When approved as a direct cost in accordance with [paragraphs (b)(1) through (3)](#b-1..b-3), capital expenditures must be charged in the period in which the expenditure is incurred or as otherwise determined appropriate and negotiated with the Federal agency.
  - (5) The recipient or subrecipient may claim the unamortized portion of any equipment written off as a result of a change in capitalization levels by continuing to claim the otherwise allowable depreciation on the equipment or by amortizing the amount to be written off over a period of years negotiated with the cognizant agency for indirect cost.
  - (6) **Cost of equipment disposal.** If the Federal agency instructs the recipient or subrecipient to otherwise dispose of or transfer the equipment, the costs of disposal or transfer are allowable.
  - (7) **Equipment and other capital expenditures are unallowable as indirect costs.** See [§ 200.436](/cfr/2/200.436.md).

## Notes

### Authority

Authority: 31 U.S.C. 503; 31 U.S.C. 6101-6106; 31 U.S.C. 6307; 31 U.S.C. 7501-7507.

### Source

Source: 89 FR 30136, Apr. 22, 2024, unless otherwise noted.