All additions to capital assets should be properly authorized
Capital assets include property, plant and equipment assets having an estimated useful life of at least two (2) years following the acquisition date
Capital assets should be reported at historical cost. The cost of a capital asset should include capitalized interest and ancillary charges necessary to place the asset into its intended location and condition for use
Items with useful lives less than two (2) years or of small monetary value (less than $5,000 per unit cost) are reported as an expense or expenditure in the period in which they are acquired
Control over non-capitalized capital-type items is maintained by adequate control procedures at the department level
General:
Property, plant and equipment are generally categorized by the following broad asset types:
Asset Type
Estimated Useful Life
Capital leases
Mains and extensions
Land
Buildings
Autos and equipment
Furniture and equipment
Lease term
10-65 years
Inexhaustible
10-15 years
3-10 years
3-10 years
Responsibility
Action
Accounting Department
Record additions of capital assets in the detailed fixed asset sub-ledger
Reconcile the detailed fixed asset sub-ledger to the general ledger.
Investigate and resolve differences found in the reconciliation.
