Laserfiche WebLink
CITY OF GEM LAKE, MINNESOTA <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br /> <br />(19) <br /> <br />NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />J. Capital Assets <br /> <br />Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., <br />roads, sidewalks, street lights, and similar items) are reported in the applicable <br />governmental or business-type activities columns in the government-wide financial <br />statements. Capital assets are recorded at historical cost or estimated historical cost if <br />purchased or constructed. The cost of normal maintenance and repairs that do not add <br />to the value of the asset or materially extend asset lives are not capitalized. Major <br />outlays for capital assets and improvements are capitalized as projects are constructed. <br /> <br />The government reports infrastructure assets on a network and subsystem basis. In the <br />case of the initial capitalization of general infrastructure assets (i.e., those reported by <br />governmental activities) the City chose to include all such items regardless of their <br />acquisition date or amount. <br /> <br />Depreciation on exhaustible assets is recorded as an allocated expense in the statement <br />of activities with accumulated depreciation reflected in the statement of net position. <br />Since surplus assets are sold for an immaterial amount when declared as no longer <br />needed for City purposes, no salvage value is taken into consideration for depreciation <br />purposes. Capital assets not being depreciated include construction in progress. <br /> <br />Depreciation Estimated <br />Assets Method Useful Life <br />Buildings Straight-Line 40 Years <br />Office Equipment Straight-Line 5 - 10 Years <br />Utility Systems Straight-Line 20 - 50 Years <br />Infrastructure Straight-Line 20 - 50 Years <br />K. Long-Term Obligations <br /> <br />In the entity-wide financial statements, long-term debt and other long-term obligations <br />are reported as liabilities in the applicable governmental activities. Bond premiums and <br />discounts are amortized over the life of the bonds using the straight-line method. Bond <br />issue costs are expensed as a current period cost. <br /> <br />In the governmental fund financial statements, bond premiums and discounts, as well as <br />bond issue costs are recognized during the current period. The face amount of the debt <br />issue is reported as on other financing source. Premiums received on debt issuances <br />are reported as other financing sources while discounts are reported as other financing <br />uses. Issue costs are reported as debt service expenditures.