Equipment for your federal grant might not be what you think it is. “Equipment” is defined by the Feds as “tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by the non-Federal entity for financial statement purposes, or $5,000.” So what does this mean? Simply put, anything with a lifespan of more than one year and a unit cost above $5,000 is considered equipment—unless, of course, your organization’s threshold for equipment is less than $5,000, then you need to follow your policy. So, if you define equipment as anything above $2,500, use your number. Items that cost less than the equipment threshold are considered supplies. Remember, you can have a more restrictive policy than federal regulations but you can’t have less restrictive policy.