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NOTE 1. —.SUMMARY OF 51GNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Capital Assets Capital assets, which include property, plant; -equipment, and infrastructure assets (e.g., roads, sidewalks, streetlights. and similar items).are repotted in the applicable: governmental or business -type. activities columns in the government -wide financial statements. Such assets are capitalized at historic%[ cost or estimated historical cost for assets where actual -historical cost is not available. The City defines. capital assets as those.*with .an initial.. individual cost of $`500 or more with an estimated useful life in excess of five years. Groups of similar assets acquired at or near the same eitne for a single objective,. with individual acquisition costs below this threshold. are also capitalized if costs of the.assets is considered significant in the aggregate. Donated assets are recorded as capital assets at their acquisition valtie at -the date of donation. The cost of norinal maintenance and repairs that do not add twthe-value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and unprovements are capitalized as projects.are constructed. The government reports infrastructure assets on a netti%orl: and subsystein basis: In*the case of`the initial capitalization of general infrastructure assets (i.e., those reported by gavemmetital* activities). the City :chose to include all such items regardless of their acquisition date. or.aniount. Capital assets are recorded in the. government -wide and proprietary fund financial statements.*but ,are'not reported.in the governmental fund financial statements. Depreciation on eAdustible assets is recorded as an allocated expense in the Statement. of Activities and proprietary funds Statement of Revenue, Expenses. and Changes in Net Position with accumulated depreciation reflected in the government -wide .and proprietary- funds Statement of Net Position. Since surplus assets are sold for an immaterial amount when declared as no longer needed for city purposes, no salvage value is .taken: into consideration .for depreciation purposes. Capital assets: are depreciated using the straight-line method over the following estimated useful lives: . Assets Buddings 0,MCC .equipment Infrastructure Estimated Useful Life 40 years 5 t. 0,10:years 20 to.5Q years Capital assets not being depreciated include land and colistructioti in progress. K. Long-Teritn Liabilities In the: gq pmment-%Vide and proprietary fund financial statements; long-term debt and other long-term obligations are reported as liabilities. If they are material, bond premiums and discounts are deferred and 'amortized ovet the life of the bonds` using the straight-liire- method. Bbnd issuance casts* afe expensed in. the period incurred, In -the governmental fund financial statements, long-term debt and other long, -term .obligations are: not reported as liabilities until due and payable.. The face amount of debt issued is reported as other financing source$. Premiums or discounts on debt issuances are reported as other financing sources or uses, respectively. Issuance costs, whether or not. withheld -from-the actual debt proceeds. received. are reported .as expenditures. *22-