2017 06-20 CC PACKET - Laserfiche WebLink

Home

CITY OF GEM LAKE, MINNESOTA NOTES TO BASIC FINANCIAL STATEMENTS ©ECEMBER 31, 2016 NOTE 1 SUMMARY OF SIGNIFICANT.ACCOUNTING POLICIES (CONTINUED) J. Capital Assets Capital assets, which. include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks; street lights, and similar items) are reported in the applicable governmental or business -type activities columns in the government -wide financial statements. Capital assets are recorded at. historical :cost or: estimated historical cost if purchased or constructed. The cost of normal maintenance; and repairs that do. not add to the value o€ the asset or materially extend asset.; lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.. The government reports infrastructure assets on a'network and subsystem basis. In the case of the .initial capitalization of general infrastructure assets (e., those reported by governmental activities) the City chose to ; include all such items, egardless of their acquisftion date or: amount. Depreciation on exhaustible assets. is recorded as an allocated expense in the statement of activities with accumulated depreciation'reflected in the statement of net position: Since surplus assets are. sold for an immaterial amount when declared as no longer needed for City purposes.., np;.salyage"value is taken. into consideration for depreciation purposes. Capital assets not being depreciated include construction in progress. Depreciation Estimated Assets Method Useful Life suildirigs Straight -Line 40 Years Ckiice Equipm66 Straight -Line 5. -10 Years Quity Systems.:; Straight -Line 20. - 50 Years Infrastructure.:Straight-Line : 20 -.5D Years K:. Long -Term e0biigations In the entity -wide financial statements, long-term debt and other long-term obligations are reported as_;Iiabilities' in the applicable: governmental activities. Bond premiums and. .. discounts are amortized over the life of the bonds using time straight-line method. Bond issue costs. are expensed as a current period cost. In th6 governmental fund financial statements, bond premiums and discounts, as well as bond issue:costs are recognized during the current period. The face amount of the debt. issue. is` reported as on other financing source.. Premiums received .on debt issuances are reported as other financing sources while discounts are reported as other financing Uses. Issue costs.are reported as debt service expenditures.