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<br />. <br /> <br />. <br /> <br />~ <br />~HILLS <br /> <br />MEMORANDUM <br /> <br />DATE: <br /> <br />December 10, 2003 <br /> <br />Agenda Item 2.E. <br /> <br />TO: <br /> <br />Mayor and Council <br />Michelle Wolfe, City Administrator <br /> <br />Aaron Parrish, Director of Community Development! Asst. City Admin.@ <br /> <br />Capital Asset Policy <br /> <br />FROM: <br /> <br />SUBJECT: <br /> <br />ENCLOSU!U:S: <br /> <br />1. Draft Capital Asset Policy <br /> <br />Overview <br /> <br />To make our financial reporting consistent with the requirelDents outlined in GASB Statement <br />#34, it is necessary to have a Capital Asset Policy in place that does the following: <br /> <br />1. Outlines the minimum dollar level, or capitalization thresholds, in which assets will <br />be reported (Section I Define Capital Assets and Capitalization Thresholds). <br />2, Details how and which capital assets will be reported (Section II Capital Asset <br />Reporting). <br />3, Provides the basis for depreciation of capital assets that meet the capitalization <br />threshold. In general, capital assets will be depreciated using the straight-line method <br />of depreciation. The straight line method of depreciation allocates the cost of the <br />asset evenly over the life of the asset (Section III Capital Asset Depreciation). <br />4. Categorizes and defines the various capital assets that are likely to require reporting <br />within the financial statements (Section IV Capital Asset Definitions and Categories). <br />5. Articulates the useful life for the yarious categories of capital assets. The useful life <br />of the various capital assets is based on IRS standards and past City practice (Section <br />V Capital Assets Estimated Useful Life). <br /> <br />With the exception of a few slight modifications, the attached document is primarily based on a <br />sample policy provided by our auditor. Since we will begin implementation of GASB 34 with <br />our next audit, it will be necessary to have this policy in place by early next year. <br /> <br />Requested Action <br /> <br />. I. Provided for discussion <br /> <br />\\Earth\Finance-\C'::ommunity Services Director\12-1O-03 Memo to Council- Capital Asset Policy.doc <br />