2023.01.24 CC Packet - Laserfiche WebLink

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5 2) Cost Definition Cost refers to an objectively determinable dollar value and will include the purchase price and any ancillary charges necessary to place the asset in its intended location and condition for use. These types of costs include sales tax, freight and transportation charges, site preparation, installation costs, professional fees and legal claims directly attributable to the asset acquisition. ACQUISITION REPORTING Assets may be acquired through direct purchase, construction, lease‐purchase or installment purchase, eminent domain proceedings, foreclosure and donation. All acquisitions must be reported to the Finance Department in order to properly maintain the capital asset system. See Attachment B. The following is a list of types of assets and how they should be reported. 1) Land Held for Resale Land purchased with the intent of resale is to be recorded at its current market value. 2) Land Land is to be capitalized but not depreciated. It is valued at historical cost and remains at that value until disposal. If there is a gain or loss on the sale of land, it is reported as a special item in the statement of activities. 3) Buildings & Building Improvements All permanent structures that are attached to land, have a roof, are partially or completely enclosed by walls, and are not intended to be transportable or moveable are included in this asset class. The City can elect to report major components of buildings as separate capital assets in their own right, when these components have a significantly shorter estimated useful life than the structure to which they relate (e.g., HVAC). Buildings should be recorded at either their acquisition cost or construction cost. Building improvements that extend the useful life should be capitalized. Examples of building improvements include roofing projects, major energy conservation projects, or remodeling or replacing major building components. 4) Equipment & Furnishings Assets such as furniture, vehicles, machinery and equipment (that meet threshold levels) should be identified and recorded. Some assets, individually, may fall below the capitalization threshold but when purchased in large quantities are material or significant enough to be grouped and capitalized together. 5) Infrastructure Infrastructure assets are long‐lived capital assets that normally are stationary in nature and can be preserved for a significantly greater number of years than most capital assets (i.e. roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems). 6) Other & Land Improvements Other and Land improvements include items such as excavation, non‐infrastructure utility installation, tennis courts, trailways, parking lots, flagpoles, retaining walls, fencing, outdoor lighting, and other non‐building improvements intended to make the land ready for its intended purpose. Land improvements can be further categorized as non‐exhaustible and exhaustible. Exhaustible ‐ Other improvements that are part of a site, such as parking lots, landscaping and fencing, are usually exhaustible and are therefore depreciable. Depreciation of site improvements is necessary if the improvement is exhaustible. Non‐Exhaustible ‐ Expenditures for improvements that do not require maintenance or replacement, expenditures to bring land into condition to commence erection of structures, expenditures for improvements not identified with structures, and expenditures for land