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. Capital assets are defined by the District as assets with an initial, individual cost of more than $1,500 and an estimated useful life in excess of one year. 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.
Land and construction-in-progress are not depreciated. Property, plant, equipment and infrastructure of the District are depreciated using the straight-line method and half-year convention. The District shall follow the estimated useful lives per the NYS Office of General Services Capital Assets Policy and Procedure Manual (Appendix E- Capital Asset Profile ID). The following are the summarized estimated useful lives when placed in service:
Class | Life in Years | |
Buildings | 10 – 45 | |
Improvements other than buildings | 15 – 20 | |
Machinery and Equipment | 5 – 40 | |
Infrastructure | 15 – 50 |
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