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CITY OF ROSEVILLE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2013 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Assets, liabilities, deferred inflows of resources, and net position/fund balance (Continued) 3. Restricted Assets Certain assets in the water fund are restricted to the extent of the customer deposits, which are carried as liabilities. Cash held in escrow in the economic increments construction fund is classified as restricted assets on the balance sheet because they are maintained and administered by an escrow agent. These funds are held for the purpose of guaranteeing the City's obligation to purchase property relating to a settlement agreement. Cash held in escrow in the debt service fund is classified as restricted assets on the balance sheet because they are maintained and administered by an escrow agent. These funds are held for the purpose of refunding a G.O. Municipal Building Bond. Cash held in escrow for the Housing Redevelopment Authority is classified as restricted assets on the balance sheet because they are maintained and administered by a third party lending administratar. Use of these funds is limited to providing housing loans to quali�ied residents. 4. Capital Assets Capital assets, which include property, plant, equipment and intrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and intangible assets such as easements and computer software are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets, except infrastructure assets, are defined by the City as assets with an initial, individual cost equal to or greater than $5,000 and an estimated useful life in excess of 2 years. Accordingly, the amounts spent for the construction or acquisition of infrastructure assets are capitalized and reported in the government-wide financial statements regardless of their amount. With the initial capitalization of general infrastructure assets (i.e., those reported by governmental activities), the City chose to include all such items regardless of their acquisition date or amount. The City's Pavement Management Plan contained all historical costs for the City's general infrastructure assets. As the City constructs or acquires additional capital assets each period, including infrastructure assets, they are capitalized and reported at historical cost. The reported value excludes narmal maintenance and repairs which are essentially amounts spent in relation to capital assets that do not increase the capacity or efficiency of the item or extend its useful life beyond the original estimate. Donated capital assets are recorded at their estimated fair market value on the date of donation. .•