(A) To be considered a “fixed asset” for financial reporting purposes, an item must be at or above the capitalization threshold and have a cost greater than $4,000. The cost of the asset will include all expenses necessary to make the asset fully operational. Assets acquired through lease purchase agreements that meet these specifications are to be capitalized. This cost will be determined as the present value or discounted value of the future stream of lease payments, and not the total lease.
(B) Capital assets are recorded at actual cost. Normally the cost recorded is the purchase price or construction cost of the asset but may also include any other reasonable and necessary costs incurred to place the asset in its intended location and intended use, including:
(1) Legal and title fees and closing costs;
(2) Appraisal and negotiation fees, surveying costs;
(3) Land preparation costs, demolition costs;
(4) Architect, engineering and accounting fees; and
(5) Transportation charges.
(C) Donated or contributed assets should be recorded at the fair market value on the date donated. If no cost is available for a fixed asset, a replacement cost or a historic cost index may be used. Items that do not meet the definition of capital assets are to be expensed in the year the asset is acquired.
(Ord. 2022-1, passed 4-26-2022)