§ 33.100  CAPITAL ASSET ACQUISITIONS.
   (A)   The method of acquisition is not a determining factor. Each department should report items acquired by:
      (1)   Regular purchase;
      (2)   Lease purchase (see divisions (B) and (C) below);
      (3)   Construction by town personnel;
      (4)   Construction by an outside contractor;
      (5)   Resolution/condemnation;
      (6)   Donation/contribution;
      (7)   Addition to an existing asset;
      (8)   Transfer from another department;
      (9)   Trade or barter; and
      (10)   Annexation.
   (B)   Lease equipment should be capitalized if the lease agreement meets any one of the following criteria:
      (1)   The lease transfers ownership of the property to the lessee by the end of the lease term;
      (2)   The lease contains a bargain purchase option;
      (3)   The lease term is equal to 75% of the estimated economic life of the leased property; and
      (4)   The present value of the minimum lease payments at the inception of the lease, excluding executory costs, equals at least 90% of the fair value of the leased property.
   (C)   Leases that do not meet any of the above criteria should be recorded as an operating lease and reported in the notes of the financial statements.
(Ord. 2016-13, passed 9-29-2016)