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Equipment costs and depreciation
Procurement of equipment
Funding for procurement of equipment is provided on the basis of independent calls for proposals for research infrastructure.
Equipment costs in research projects
- Any operational costs for use of the equipment are to be entered under “Other operational expenses” on the application form.
- Costs for procurement of equipment and material that is necessary for the execution of the project and that will not be of any additional use outside the scope of the project is considered to be a direct project expense and should be entered under “Other operational expenses” on the application form.
- Project participants must themselves cover the cost of all equipment, including laboratory and office equipment, that has a purchase price of less than NOK 100 000 and that will be of additional use outside the scope of the project for which funding is sought. Expenses for procurement of such equipment are not to be included in the grant application.
- Costs related to depreciation of equipment used in a project may be included as part of the project costs in a grant application if the equipment will be of additional use outside the scope of the project, and has been procured independently of any support from the Research Council at a purchase price of more than NOK 100 000. This applies even in cases when the purchase amount has not been entered into the project owner’s actual accounts in depreciation increments. Procedures for how to calculate depreciation costs and enter these into the accounts are provided below.
Calculating equipment depreciation costs and entering these into accounts
Depreciation schedule
The depreciation schedule used in the grant application must be based on the time frame that the owner of the equipment (project owner or partner) has stipulated for equipment write-offs in its ordinary accounting procedures or financial programmes. If the institution does not have any established guidelines, a five-year period of depreciation is to be applied.
Amount to be written off
Depreciation costs to be included in the grant application are limited to the share (percentage) of the equipment to be used in the project. If the project will be using x% of the equipment capacity, then only x% of the depreciation costs may be included. This means that it will only be possible to obtain a full write-off rate for research infrastructure investments for equipment whose use will be solely dedicated to the project. Depreciation costs may only be included within the period of depreciation established for the equipment (see example below). Good accounting practice and any existing guidelines for write-offs and accounting procedures are to be employed.
The depreciation costs should be entered in the row for “Equipment” on the application form.
Example: how to calculate depreciation costs
An institution applies for funding for a four-year project with start-up in 2011. The project will be using equipment installed in 2009, that was purchased by the institution for an amount of NOK 2 million. The Research Council has not contributed to funding for the purchase of the equipment. The depreciation period is five years (2009-2013). The project’s use of the equipment’s capacity will be somewhat uneven during the project period, but will comprise an average of 20% of the annual capacity the two first years and 10% the two last years.
| Year | Depreciation cost for the institution (in NOK 1000) |
Calculation, share of depreciation cost (in NOK 1000) | Entered under “Equipment” in the grant application form (in NOK 1000) |
| 2009 | 400 |
(Project start-up not until 2011) | (Project start-up not until 2011) |
| 2010 | 400 | (Project start-up not until 2011) |
(Project start-up not until 2011) |
| 2011 | 400 | 80 (20% of 400) | 80 |
| 2012 | 400 | 80 (20% of 400) | 80 |
| 2013 | 400 | 40 (10% of 400) | 40 |
| 2014 | 0 | 0 (equipment is fully written off) | 0 |
| Total | 2000 | 200 |
- Published:
- 03.03.2010
- Last updated:
- 30.09.2011
