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Fixed Assets Policy and Procedures
Additions to Capital Assets
07/11/2016

Additions to  Capital Assets

Policy:

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                           Lease term

Mains and extensions             10-65 years

Land                                        Inexhaustible

Buildings                                10-15 years

Autos and equipment            3-10 years

Furniture and equipment       3-10 years


Responsibility

Accounting Department

Action

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.

 

Procedure Coordinator: Director of Finance


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