[HISTORY: Adopted by the Board of Selectmen of the Town of Madison 12-10-1984.
Amendments noted where applicable.]
A.
Whereas: The auditor qualifies his opinion, places us
in competitive disadvantage in the credit market; and
B.
Whereas: Management information is needed to locate and
transfer equipment from one department to another. Idle assets will be identified
and sold. Unexplained disappearances of fixed assets will be reduced. Fixed
assets will be identified for insurance purposes. Plans for acquisition and
retirement of assets will be based upon the system of fixed asset account;
and
C.
Whereas: Stewardship needs provide for an accountability
for Town government capital expenditures over the years.
D.
Now therefore, be it resolved: That the Board of Selectmen
hereby outlines a policy regarding fixed assets as follows:
B.
The following assets will not be included in the system:
(1)
Land;
(2)
Landscaping;
(3)
Spare parts;
(4)
Improvements other than buildings;
(5)
Records, reports, studies, plans, etc.;
(6)
Discarded equipment with no monetary value;
(7)
Supplies and expendables;
(8)
Streets, sidewalks and bridges considered as part of
rights-of-way;
(9)
Storm drains and sewers;
(10)
Art work and antiques, except for in-use value;
(11)
Easements; or
(12)
Assets with unit reproduction cost of less than $300.
The following information shall be collected for each individual fixed
asset:
A.
Asset class — building and structures or equipment;
B.
Function and activity — department;
C.
Acquisition source — general fund purchase, capital
purchase, gift, lease, etc.;
D.
Acquisition date;
E.
Name and address of vendor;
F.
Short description of asset with serial number;
G.
Department with custody;
H.
Location;
I.
Estimated useful life;
J.
Estimated salvage value; and
K.
Date, method and authorization for disposition.
A.
Historical costs can be found or estimated from a number
of sources: vendor invoices, purchase orders, cancelled checks, vouchers,
contracts, Town Meeting or Selectmen's minutes, ledgers, inventory cards,
maintenance records, general and capital budgets, offering circulars, insurance
policies, price list and independent appraisers. If historical costs are still
lacking, then current replacement costs may be relevant price levels at the
acquisition date to estimate original cost. Donated fixed assets should be
recorded at their estimated fair market value at the time received. All interest
costs incurred during construction shall be included in cost of fixed asset
as shall other ancillary costs such as freight and transportation charges,
site preparation expenditures and professional fees.
B.
Replacement costs information may be obtained from current
vendors' price lists, independent appraisers, and published price-trend data
for various asset classes.
C.
Depreciation rates for each class of asset will be based
upon past experience for normal useful life. This will serve as a schedule
for replacement. Examples of this would be a fire truck has a thirty-year
life. It would be depreciated 1/30 each year and scheduled for replacement
30 years after purchased.
D.
Upon disposal or retirement, the fixed asset is removed
from accounting records by reversal of original entry and any salvage proceeds
are recorded as revenues in the general fund.
Beginning January 1, 1985, all departments will maintain a record of
fixed assets under its custody. Annually, in December, each department head
will update the inventory of fixed assets and notify the Town Clerk of changes
by December 31.