If your project needs new equipment, that is specific supplies and/or tools, you have different options to consider. The European Commission (EC) allows you to choose between buying, leasing or renting. Read on to learn the rules and make the best decision for your project.
Buying new equipment
If you decide to purchase new equipment you can only declare depreciation costs to the EC, not the full purchase amount from the invoice. This also applies if you use your existing equipment.
What is depreciation?
Depreciation is defined as the reduction of costs of a fixed asset over a period of time until the value of the asset becomes zero. The number of months over which equipment depreciates is determined by its useful life. The useful life is in turn determined according to the company’s accounting policy and standard practices.
Therefore, if an equipment’s useful life is longer than a year, you cannot charge the total cost of the item in a single year.
What if the equipment is used only partly for the project?
If a piece of equipment is not used exclusively for the EU project, depreciation can only be claimed in the amount of the respective usage share. The share of use must be documented and verifiable by means of a so-called ‘equipment/machine logbook’ to prove the actual percentage of H2020 project share.
Can I declare equipment that was bought before project start?
Equipment already owned by the company before the start of the project, which has not yet been fully depreciated or financed from other funds, can be used in your project and continue to depreciate.
How to properly calculate equipment (depreciation) costs?
To calculate depreciation within H2020 you need to know: the period in months during which the equipment is used for the project, the depreciation period (useful life) of the equipment, the full equipment cost according to the invoice and finally the percentage of usage of the equipment for the project. The depreciation costs must be calculated for each reporting period.
Renting or leasing
If you decide to rent or lease equipment it must comply with the following eligibility conditions:
- The cost cannot exceed the depreciation costs incurred if the equipment had been purchased and depreciated under normal accounting practices
- This cannot include any interest on loans taken to finance the purchase or any other type of financing fees
Please note that if you decide to buy, rent or lease equipment, the ‘best value for money’ principle must be respected with no conflicts of interest. It is advisable to contact potential suppliers and request several offers before making a final choice.
The equipment charged to the project – whether fully or partially dedicated to the project – must be labelled with a special sticker with the EU emblem and the official promotion sentence, as per the Grant Agreement.
Would you like to know more about how to properly charge equipment costs to the project? Do you need help preparing documentation to justify equipment costs? Contact email@example.com for guidance and support.