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Fixed Assets Policy and Procedures
Depreciation of Capital Assets
Depreciation of Capital Assets


The cost (less salvage value) of all exhaustible capital assets should be  allocated (depreciated) over the estimated useful lives using the straight-line method.

The useful life should be determined when the asset is acquired.

Amortization of capital leases is included in depreciation expense.

Depreciation expense that can be specifically identified with a function should be included with its direct expense in the statement of activities (full cost allocation approach as used in GASB Statement 34).

Depreciation expense for general infrastructure capital assets should be reported as a direct expense of the function normally associated with capital outlays for, and maintenance of, general infrastructure fixed assets or as a separate line in the statement of activities.

Valuation for infrastructure capital assets acquired prior to implementation of GASB 34: Estimated accumulated depreciation is reported for infrastructure capital assets if determining the accumulated depreciation of general infrastructure capital assets is not practical because of inadequate records.

Depreciation expense is not reported for eligible infrastructure capital assets that are reported by the Modified Approach.


Capital assets are generally categorized by the following broad asset types.

Asset Type                                                 Estimated Useful Life

Roads                                                           20-35 years

Water and sewer mains and extensions      30-65 years

Drainage Systems                                       10-35 years

Capital leases                                             Lease term

Land                                                           Inexhaustible

Buildings                                                   10-15 years

Autos and equipment                               3-10 years

Furniture and fixtures                               3-10 years


Accounting Department


Record depreciation expense of capital assets.

Reconcile depreciation expense and accumulated depreciation in the detailed fixed asset sub-ledger to the  general ledger.

Investigate and resolve differences found in the reconciliation.

Results of the reconciliation should be reviewed and approved by the Director of Finance before any adjustments are recorded. Such review should be evidenced by a signature.

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