The Case for Capitalizing Portable Electronic Devices (PEDs) [SUBSCRIBERS-ONLY]

Nonprofit organizations are now accustomed to living with changing conditions. Change can come in many different forms, from dramatic and fast (remote working, inflation) to subtle and out of sight (technology, rules, and regulations). A noteworthy example involves portable electronic devices (PEDs), which have seen subtle steady changes leading to lower cost with expanded performance and capacity. These changes have led to new risks that deserve special attention.

The National Institute of Standards and Technology (NIST), a federal agency within the U.S. Department of Commerce, defines PEDs as:

“Electronic devices having the capability to store, record, and/or transmit text, images/video, or audio data. Examples of such devices include, but are not limited to: pagers, laptops, cellular telephones, radios, compact disc and cassette players/recorders, portable digital assistant, audio devices, watches with input capability, and reminder recorders.”

PEDs are part of a broad asset category covering most of the electronic equipment used by nonprofits today. The performance and capacity of PEDs have steadily increased while cost per unit has continued to gradually decline. These are positive attributes but are having an unintended impact on capitalization policies.