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CCP 01-12-2004
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CCP 01-12-2004
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<br />CITY OF ARDEN HILLS <br />CAPITAL ASSET POLICY <br /> <br />. <br /> <br />PURPOSE <br /> <br />It is the policy of the City of Arden Hills to maintain appropriate procedures regarding the <br />procurement, management, and disposal of all capital assets, in accordance with Governmental <br />Accounting Stands Board Statement No. 34 (GASB 34). The Capital Assets Policy addresses <br />classes of assets, determination of useful lives, and calculation of depreciation. <br /> <br />SECTION I <br />DEFINE CAPITAL ASSETS AND CAPITALIZATION THRESHOLDS <br /> <br />A capital asset is real or personal property used in operations and having a value equal to or <br />greater than the capitalization threshold set forth by the City, for that specific asset classification, <br />and has an estimated useful life greater than one year. For financial reporting purposes only, the <br />City will classify and establish capitalization thresholds for each asset class as follows: <br /> <br />CAPITAL ASSET CLASSIFICATION CAPITALIZATION THRESHOLD <br />Land and land improvements; $10,000 <br />Other improvements $25,000 <br />Buildings and building improvements; $25,000 <br />Machinery and equipment; $ 5,000 <br />Vehicles; $ 5,000 <br />Infrastructure; and $100,000 <br />Construction-incprogress. Accumulate all costs and capitalize if <br /> over $25,000 for buildings or other <br /> improvements and $100,000 for <br /> infrastructure. <br />Other assets $ 5,000 <br /> <br />. <br /> <br />Another criterion for recording capital assets is capital-related debt. Capitalizing these assets <br />will minimize the potential of reporting negative net assets in the statement of net assets. In most <br />cases, these assets will meet tbe thresholds and guidelines for recording as a capital asset. <br /> <br />SECTION II <br />CAPITAL ASSET REPORTING <br /> <br />Capital assets should be recorded and reported at their historical costs, which includes costs <br />necessary to placing a capital asset into its intended use or state of operation. Historical cost <br />includes the vendor's invoice, the value of any trade-in or allowance, sales tax, initial installation <br />cost (excluding in-house labor), modifications, attachments, accessories or apparatus; and <br />ancillary charges sucb as freight and transportation charges, site preparation costs, and <br />professional fees. <br /> <br />In the event the historical cost of a capital asset is not determinable, it will be necessary to record <br />an estimated historical cost of the asset using alternative methods. Alternative methods include <br />standard costing and normal costing. Standard costing estimates the historical cost of a capital . <br />asset by establishing the average cost of obtaining the same or a similar asset at the time of <br /> <br />4 <br />
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