Capital assets are defined as tangible and intangible assets
that have initial useful lives that extend beyond a single reporting
period.
All capital assets are recorded at historical cost as of the
date acquired or constructed. If historical cost information is not
available, assets are recorded at estimated historical cost by calculating
current replacement cost and deflating the cost using the appropriate
price-level index.
In accordance with GASB Statement No. 34, the Town records,
at a minimum, "major" infrastructure assets as defined in Statement
No. 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
Town does not use the "modified approach" to record infrastructure.
Detailed records are maintained at the discretion of the Town
Manager for all items below the capitalization thresholds that should
be safeguarded from loss. These items are part of the annual physical
inventory discussed below. These items include firearms and computer
equipment that fall below the established thresholds and any other
assets specified by the Town Manager.
The Town Manager will assign an estimated useful life to all
assets for the purposes of recording depreciation. The attached Suggested
Useful Lives schedule is 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 is recorded based on the straight line method using actual-month
convention and depreciated down to the assets salvage value.
All machinery and equipment, vehicles and furniture is assigned
an asset number and identified with a fixed asset tag. As fixed assets
are purchased or disposed of, the department head in custody of that
asset is responsible for preparing a fixed asset data sheet, which
is then forwarded to the business office 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 are forwarded
to the Town Office where appropriate adjustments will be made to the
fixed asset records.