I. PURPOSE The intent of capitalizing assets owned by the district is to spread the cost of an asset over the useful life of the asset.
II. POLICY Capital assets, which include property, plant and equipment are reported in the governmental activities’ column in the government-wide financial statements.
Fixed assets are assets purchased or constructed by Pound Ridge Library that have a useful life of one (1) or more years and that have a value equal to or greater than the capitalization thresholds in the table below. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Capital assets with a value under the applicable capitalization parameters will be expensed in the year purchased and recorded as such on the financial statements. Donated capital assets are recorded at the estimated fair market value at the date of donation. Major outlays for capital assets and improvements are capitalized as projects are constructed. The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives is not capitalized. The useful life of an asset is the period of time over which an asset may reasonably be expected to be utilized for its intended use, as measured from the time when the asset is first placed in service. The useful life should be based on estimates not exceeding the period of probable usefulness per NYS Local Finance Law.
Capitalization Threshold – The minimum acquisition cost of an asset for it to be considered a fixed asset. Assets not meeting the capitalization threshold should be expensed in the period of acquisition. The minimum costs by category are as follows:
- Land – $10,000
- Buildings – $10,000
- Building Improvements – $5,000
- Furniture, Fixtures, and Equipment – $5,000
- Infrastructure – $10,000
Estimated Useful Life – Fixed assets should be depreciated straight-line as follows:
Class Life in Years
Buildings 40 years
Improvements other than buildings 5-40 years
Furniture, Fixtures and Equipment 5-10 years
Infrastructure 5-40 years
Land is not depreciated.
Once fully depreciated, the asset should be removed from the current period accounting records. However, if still in service, the asset shall continue to be listed in the Library’s asset register.
The costs associated with the acquisition or construction of capital assets are shown as capital outlay expenditures on the governmental fund financial statements and enterprise funds. Capital assets are not shown on the governmental fund balance sheet.
Policy approved by the Pound Ridge Library Board of Trustees, March 19, 2020
Policy effective date April 1, 2020
Policy approved by the Pound Ridge Library Board of Trustees, June 18, 2024
