Policy - DIF
EFFECTIVE DATE: 5/2/18
CANCELS SHEET DATED: NEW
REVIEWED BY POLICY COMMITTEE: 4/10/18
This policy establishes the minimum cost value (capitalization amount) that shall be used to determine the capital assets, including infrastructure assets, that are to be recorded in the District’s annual financial statements in order to comply with the requirements of GASB Statement No. 34.
This policy also addresses other considerations for recording and depreciating fixed assets in order to comply with the provisions of GASB Statement No. 34.
Capital Asset Definition
Capital assets will be defined as tangible and intangible assets that have initial useful lives that extend beyond a single reporting period.
All capital assets will be recorded at historical cost as of the date acquired or constructed. If historical cost information is not available, assets will be recorded as estimated historical costs by calculating current replacement cost and deflating the cost using the appropriate price-level index.
The District establishes the following minimum capitalization thresholds for capitalizing fixed assets:
Land and Improvements $25,000
Buildings and Improvements $50,000
Detailed records shall be maintained for all fixed assets above the established thresholds.
In accordance with GASB Statement No. 34, the District will record, at a minimum, “major” infrastructure assets, as defined in Statement No. 34, that were acquired, constructed, or significantly reconstructed, or that received significant improvements after June 30, 1980. Other infrastructure assets may be capitalized as deemed appropriate. The District does not intend to use the “modified approach” to record infrastructure.
Detailed records shall be maintained at the discretion of the Business Office for all items below the capitalization thresholds that should be safeguarded from loss. These items will be part of the annual physical inventory discussed below. These items may include computer equipment that falls below the established thresholds and any other assets specified by the Business Office.
Depreciation and Useful Life
The Business Office, after consulting with the District’s Auditor, will assign an estimated useful life to all assets for the purposes of recording depreciation. Asset lives will be adjusted as necessary depending on the present condition and use of the asset and based on how long the asset is expected to meet current service demands. Adjustments should be properly documented. Depreciation will be recorded based on the straight line method using actual month convention and depreciated down to the asset’s salvage value.
Safeguarding and Controlling Fixed Assets
The Business Office will maintain a database of fixed assets and update it on an ongoing basis for current additions and deletions. A physical inventory will be taken annually on or about June 30 and compared to the physical inventory records. The results will be forwarded to the Business Office where appropriate adjustments will be made to the fixed asset records.