NEPN/NSBA Code: DIF
This policy establishes the minimum cost value ($10,000) that shall be used to determine the capital assets, including infrastructure assets, that are to be recorded in the School’s/Town’s annual financial statements in order to comply with the requirements of GASB Statement No. 34.
This policy also addresses other considerations for recording and depreciating fixed assets in order to comply with the provisions of GASB Statement No. 34
A. Capital Asset definition:
Capital assets will be defined as tangible and intangible assets that have initial useful lives that extend beyond a single reporting period.
B. Capitalization method:
All capital assets will be recorded at historical cost as of the date acquired or constructed. If historical cost information is not available, assets will be recorded at estimated historical cost by calculating current replacement cost and deflating the cost using the appropriate price-level index.
C. Capitalization thresholds:
The Town establishes the following minimum capitalization thresholds for capitalizing fixed assets:
Land and improvements $1
Buildings and improvements $1
Furniture & equipment $10,000
Detailed records shall be maintained for all fixed assets above the established thresholds.
D. Infrastructure assets:
In accordance with GASB Statement 34, the School Department will record, at a minimum, “major” infrastructure assets as defined in Statement 34 that were acquired, constructed or significantly reconstructed, or that received significant improvements after June 30, 1980. Other infrastructure assets may be capitalized as deemed appropriate. The School Department does not intend to use the “modified approach” to record infrastructure.
E. Other assets:
Detailed records shall be maintained at the discretion of the Superintendent for all items below the capitalization thresholds that should be safeguarded from loss. These items will be part of the annual physical inventory discussed below. These items include technology equipment that fall below the established thresholds and any other assets specified by the Superintendent.
F. Depreciation and useful life:
The Finance Director will assign an estimated useful life to all assets for the purposes of recording depreciation. The attached “Suggested Useful Lives” schedule will be used to establish lives for most assets. Asset lives will be adjusted as necessary depending on the present condition and use of the asset and based on how long the asset is expected to meet current service demands. Adjustments should be properly documented. Depreciation will be recorded based on the straight line method using actual month convention.
G. Safeguarding and controlling fixed assets:
All machinery and equipment, vehicles and furniture that meet the capitalization threshold will be assigned an asset number. As fixed assets are purchased or disposed of, the Department Head in custody of that asset will be responsible for preparing a fixed asset data sheet, which will then be forwarded to the Finance Department to ensure proper recording. A physical inventory will be taken annually on or about June 30 and compared to the physical inventory records. The results will be forwarded to the Finance Department where appropriate adjustments will be made to the fixed asset records.
Capital Assets of Local Governments
Suggested Useful Lives:
Depreciable Life in Years
Furniture, office equipment
Desk, tables, chairs
Monitor, CPU, Laptop, printer
Administrative: Long term
Fax, Duplicating, Printing
Audio Visual Equipment
Projectors, Cameras (Still & Digital)
Pianos, String, Brass, Etc.
Weight machine, mats, golf carts, treadmills, tackling sled, pitching machines, etc.
Cars & light trucks
Heavy construction equipment
Backhoes, trucks, dozers, front-end loaders, tractors
Buildings - Temporary
Furniture & Accessories
Classroom & Other Furniture
Playgrounds, Radio Towers, Fuel Tanks, Pumps
Mowers, Tractors & Attachments
Machinery & Tools
Shop & Maintenance Equipment, Tools
Floor Scrubbers, Vacuums
Air-conditioners, Heating, Ventilation
Fire Suppression Systems
Police Special Equipment
Traffic Control Equipment
Paving, Flag Pole, Retaining Walls, Sidewalks, Fencing, Outdoor Lighting
Land Improvements: Structure
Parking Lots, Sidewalks, Bus Ramps, Fencing, Running Track, Flagpole
Land Improvements: Ground Work
Golf Course, Ball Field, Park, Landscaping
Land Disposal Systems
Sewage Treatment Plants
Sewage Disposal Works System
Levees and Canals (unlined)
Asphalt - Rural
Asphalt - Urban
Adopted: March 25, 2004