For the purpose of this subchapter, the following definitions shall apply unless the context clearly indicates or requires a different meaning.
CAPITAL ASSETS. Acquired for use in operations and not for resale. They are long-term in nature and subject to depreciation. They possess physical substance.
COMPONENT UNIT. Individual identifiable pieces of a capital asset or a group of capital assets.
DEPRECIATION. The systematic and rational allocation of the estimated historical cost of a capital asset (or if donated, the fair value of the capital asset at the time of donation) over its estimated useful service life.
ESTIMATED USEFUL LIFE. The period of time over which an asset’s cost will be depreciated.
FAIR MARKET VALUE. An estimate of what a willing buyer would pay to a willing seller, both in a free market, for an asset or any piece of property.
GASB 34. The Governmental Accounting Standards Board’s (GASB) Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis, require state and local governments depreciate their exhaustible capital asset, including infrastructure.
HISTORICAL COST. The actual exchange value in dollars at the time the asset was acquired. It is measured by cash or cash equivalent price of obtaining the asset and charges necessary to bring it to its intended location and to place the asset in its intended condition for use.
INFRASTRUCTURE. The structures that support a society, such as roads, flood management systems, telecommunications, drainage, and so forth.
REPLACEMENT. The substitution of a new facility or component of an existing facility.
SALVAGE VALUE. An estimate of the amount that will be realized at the end of the useful life of a depreciable asset.
STRAIGHT-LINE DEPRECIATION METHOD. Is determined by the formula: (cost-salvage value)/estimated useful life=depreciation per period.
(Ord. 21-02, passed 1-5-2021)