Fixed Assets
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:

  1. Land and improvements $1

  2. Buildings and improvements $1

  3. Machinery/equipment/vehicles $10,000

  4. Infrastructure $1

  5. 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:

Asset Type

Examples

Depreciable Life in Years

Non-Infrastructure

Furniture, office equipment

Desk, tables, chairs

5

Computer hardware

Monitor, CPU, Laptop, printer

5

Computer Hardware

Networks

5-10

Computer Software

Administrative: Long term

10-20

Telephone equipment

10

Radio/Communications equipment

Mobile/portable radios

10

Business Machines

Fax, Duplicating, Printing

10

Copiers

5

Audio Visual Equipment

Projectors, Cameras (Still & Digital)

10

Musical Instruments

Pianos, String, Brass, Etc.

10

Artwork

Collections

5-7

Library Books

Collections

5-7

Recreational/Athletic Equipment

Weight machine, mats, golf carts, treadmills, tackling sled, pitching machines, etc.

10

Motor Vehicles

Cars & light trucks

5-8

Busses

School, City

1-=12

Heavy construction equipment

Backhoes, trucks, dozers, front-end loaders, tractors

10

Fire Trucks

15

Buildings

Buildings - Temporary

15

Buildings

40

School Buildings

50

Portable Classrooms

25

Furniture & Accessories

Classroom & Other Furniture

20

Outdoor Equipment

Playgrounds, Radio Towers, Fuel Tanks, Pumps

20

Grounds Equipment

Mowers, Tractors & Attachments

15

Machinery & Tools

Shop & Maintenance Equipment, Tools

15

Custodial Equipment

Floor Scrubbers, Vacuums

12

HVAC Systems

Air-conditioners, Heating, Ventilation

20

Roofing

20

Interior Construction

25

Carpets

7

Sprinkler/Fire Systems

Fire Suppression Systems

25

Electrical/Plumbing

30

Kitchen Equipment

Appliances

15

Engineering/Scientific Equipment

Lab Equipment

10

Firefighting Equipment

Ladders, Hoses

10

Police Special Equipment

10

Medical Equipment

5

Traffic Control Equipment

Stoplights

10

Land

No Depreciation

Site Improvements

Paving, Flag Pole, Retaining Walls, Sidewalks, Fencing, Outdoor Lighting

20

Land Improvements: Structure

Parking Lots, Sidewalks, Bus Ramps, Fencing, Running Track, Flagpole

20

Land Improvements: Ground Work

Golf Course, Ball Field, Park, Landscaping

30

Land Disposal Systems

25

Sewage Treatment Plants

25

Infrastructure

No Depreciation

Easements

25

Water Systems

25

Sewage Disposal Works System

25

Waterway

No Depreciation

Levees and Canals (unlined)

30

Canal Lining

Dams

Concrete

50

Steel, Sheeplie

30

Earthen Embankment

No Depreciation

Roads

Paved

40

Asphalt - Rural

40

Asphalt - Urban

20

Non-Paved

50


Adopted: March 25, 2004