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Equipment and Depreciation Recovery

Directive Statement

Educational Business Activities (EBA) of the University of Florida may not include depreciation expense as part of their unit’s rates charged to internal users*.  The cost of future equipment replacement cannot be built into the rates.

*Specialized Service Center that is approved by the Division of Sponsored Research and Vice President of Finance and Chief Financial Officer may include both direct and indirect costs and are therefore excluded from the F&A cost pool of the institution.

Reason for Directive

The University elected to include the depreciation in the Federal Facilities and Administration (F&A) cost pool of the institution.  Therefore, it is not an allowable cost as it could result in double-charging.

Who must comply?

All Educational Business Activities.


F&A Rate percentage is applied to the expenditures of federally sponsored projects in order to recover the portion of the University overhead costs related to the execution of sponsored programs and includes expenses such as building and equipment depreciation, interest, utilities, general administration, and the library.  For more information regarding F&A Rate, please see Cost Accounting.

Equipment Replacement Plan

When establishing an EBA, a requesting department that uses machinery and other capital equipment must consider establishing an equipment replacement plan to ensure obsolescence is addressed with funds outside of the revenue generated from EBA internal users.

External surcharge revenue generated through sales to customers outside the University departments can be used to replace equipment of the EBA.

Last Reviewed

01/31/2021: reviewed content


Educational Business Activity

Revenue-generating activity from the provision of goods and/or services.  Such activity enhances, promotes, or supports the University’s instruction, research, public service and campus support functions, and other educational and support functions in order to meet the needs of students, faculty, staff, and members of the public participating in University events and programs.


Educational Business Activity Rate Principles


Educational Business Activity/Auxiliary Accounting: (352) 294-7236

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