Effective January 1, 2026, Assembly Bill 629 (Chapter 62, Statutes of 2025) raised California’s equipment inventory threshold from $500 to $1,500, amending Education Code Section 35168. School districts and county offices of education are now only required to maintain inventory records for equipment items with a market value above $1,500. The Superintendent of Public Instruction will adjust that figure every two years for inflation, rounded to the nearest $50, and post it on the CDE website.
The new number is clear. What the law doesn’t answer is the question every California business office is now asking: what do you do with the thousands of assets already on your books between $500 and $1,500?
This guide walks through a practical, audit-defensible approach to the transition — including which assets you can remove right away.
What did AB 629 change about Education Code 35168?
Before 2026, EC 35168 required districts to inventory every item of equipment with a current market value over $500. AB 629 raised that floor to $1,500 effective January 1, 2026. Note that the 2024 California School Accounting Manual (CSAM) Procedure 430, Capital Assets, still references the old $500 figure – the CDE has confirmed the next CSAM edition will reflect the new threshold, and that districts may begin using $1,500 now.
Importantly, AB 629 also reaffirmed that your inventory must record the date and manner of disposal for each item when it’s disposed of – which matters for the transition plan below.
Do I have to remove all assets under $1,500 from my records?
No – and you shouldn’t. It’s tempting to read “the threshold is now $1,500” as “delete everything below $1,500,” but a blanket purge creates two problems:
- You lose accountability over assets your district still owns and uses. Laptops, AV gear, and other theft-prone items don’t stop being your responsibility because the recordkeeping floor moved.
- You invite audit scrutiny. A sudden, unexplained mass write-off is exactly the kind of large swing in your asset records that draws auditor questions.
The threshold change governs what you’re *required* to track going forward. It is not a mandate to abandon everything below it on day one.
The recommended approach: grandfather old assets, apply $1,500 going forward
The cleanest transition keeps your existing records intact while letting the new threshold take over naturally:
- Keep existing $500+ assets on the ledger. Leave them where they are and keep your normal disposal process running. When one is surplused, lost, or retired, remove it through your standard workflow at that point — recording the date and manner of disposal as EC 35168 requires.
- Apply the $1,500 threshold only to new acquisitions and physical inventories. Anything you purchase from here forward is added to inventory only if it meets $1,500. When field teams run physical inventories, they verify and tag only at the new $1,500 level.
Over the next several years, the population of $500–$1,500 assets steadily trickles off your ledger through ordinary disposal. Eventually your records reflect the $1,500 threshold entirely — with no disruptive bulk adjustment and a clean audit trail the whole way.
Which assets can I remove from my fixed asset ledger right now?
There’s one category you don’t have to wait on. Assets that fall below $1,500 and have already exceeded their useful life can be removed now, based on purchase date. These are already fully depreciated, no longer required to be tracked, and add clutter without adding accountability value.
The cleanest method is by category, using your existing useful-life conventions:
– Technology (laptops, tablets, projectors, networking gear) under $1,500 and 5 years or older → remove now.
– Furniture and furnishings under $1,500 → wait until 10 years or older, then remove.
– Other equipment → follow the useful-life schedule your district already uses for depreciation.
This gives you an immediate, defensible cleanup of genuinely dead records while leaving everything still within its useful life to age out through normal disposal.
Your transition checklist
- Freeze additions at $1,500. Update your acquisition and capitalization policy.
- Set physical inventory scope at $1,500. Field teams verify and tag only at the new threshold.
- Keep the disposal process running for legacy $500+ assets. Let them retire naturally.
- Run a one-time useful-life cleanup of below-threshold, past-useful-life items by category.
- Document the policy so your auditor sees a deliberate, consistent method.
A note on board policy and your auditor
Because the threshold is statutory but the *transition method* is left to district judgment, memorialize your approach in board policy or administrative regulation, and give your external auditor a heads-up before your next cycle. Auditors are generally comfortable with a grandfathering-plus-useful-life approach precisely because it’s conservative and documented. What raises flags is the opposite — large, undocumented swings. A written policy turns “why did 4,000 assets disappear?” into “here’s our board-adopted transition plan.”
Frequently asked questions
When did California’s $1,500 equipment inventory threshold take effect?
January 1, 2026, under AB 629 (Chapter 62, Statutes of 2025), which amended Education Code Section 35168. The prior threshold was $500.
Do districts have to remove all assets under $1,500 immediately?
No. The recommended approach is to keep existing $500+ assets on the ledger and let them age off through normal disposal, while applying the $1,500 threshold only to new acquisitions and physical inventories.
Can any below-threshold assets be removed right away?
Yes, items under $1,500 that have already passed their useful life can be removed now based on purchase date (e.g., technology 5+ years old, furniture 10+ years old).
Will the $1,500 threshold change again?
Yes. The Superintendent of Public Instruction adjusts it biennially for inflation, rounded to the nearest $50, and posts the updated figure on the CDE website.
Does CSAM reflect the new threshold yet?
Not as of the 2024 edition, Procedure 430 still references $500. The CDE has confirmed the next CSAM edition will be updated, and districts may use $1,500 now.
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Working through this transition? Divot Assets helps California districts right-size their fixed asset records and run physical inventories at the new $1,500 threshold. Contact us to talk through your cleanup plan.
