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. . . CITY OF ARDEN HILLS CAPITAL ASSET POLlCY PURPOSE It is the policy of the City of Arden Hills to maintain appropriate procedurcs regarding thc procurement, management, and disposal of all capital assets, in accordance with Governmental Accounting Stands Board Statement No. 34 (GASB 34). The Capital Assets Policy addresses classcs of assets, determination of useful lives, and calculation of depreciation. SECTION I DEFINE CAPITAL ASSETS AND CAPITALIZATION THRESHOLDS A capital asset is real or personal property used in operations and having a value equal to or greater than the capitalization thrcshold set forth by the City, for that specific asset classification, and has an estimated useful life greater than one year. For financial reporting purposes only, the City will classify and cstablish capitalization thresholds for each asset class as follows: CAPITAL ASSET CLASSIFICATION CAPITALIZATION THRESHOLD Land and land improvements; $10,000 Other improvcments $25,000 Buildings and building imurovements; $25,000 Machinery and equipment; $ 5,000 Vehicles; $ 5,000 Infrastructure; and $100,000 Constructi on-in -progress. Accumulate all costs and capitalize if over $25,000 for buildings or other improvements and $100,000 for infrastructure. Other assets $ 5,000 Another criterion for recording capital assets is capital-related debt. Capitalizing these assets will minimize the potential of reporting negative net assets in the statement of net assets. In most cascs, these assets will mect the thresholds and guidelines for recording as a capital asset. SECTION II CAPITAL ASSET REPORTING Capital assets should be recorded and reported at their historical costs, which includes costs necessary to placing a capital asset into its intended use or state of operation. Historical cost includes the vendor's invoice, the value of any trade-in or allowance, sales tax, initial installation cost (excluding in-house labor), modifications, attachments, accessories or apparatus; and ancillary charges such as freight and transportation charges, site preparation costs, and professional fees. In the event the historical cost of a capital asset is not determinable, it will be necessary to record an estimated historical cost of the asset using alternative methods. Alternative methods include standard costing and normal costing. Standard costing estimates the historical cost of a capital assct by establishing thc average cost of obtaining the same or a similar asset at the time of 4