(A) The town and its various departments shall classify capital expenditures as capital outlays within the fund from which the expenditure was made in accordance with the “Chart of Accounts for Cities and Towns” accounting manual. The cost of property, plants and equipment includes all expenditures necessary to put the asset into position and ready for use. For the purpose of recording the fixed assets of the town and its departments, the valuation of assets shall be based on historical cost or, where the historical cost is indeterminable, by estimation for those assets in existence.
(B) The town’s municipally-owned utilities shall record the acquisition of fixed assets in accordance with generally-accepted accounting principles. When an asset is purchased for cash, the acquisition is simply recorded as the amount of cash paid, including all outlays related to its purchase and preparation for its intended use.
(C) (1) Assets may be acquired under a number of other arrangements, including:
(a) Assets acquired for a lump-sum purchase price;
(b) Purchase on a deferred payment contract;
(c) Acquisition under capital lease;
(d) Acquisition by exchange for nonmonetary assets;
(e) Acquisition by issuance of securities;
(f) Acquisition by self-construction; or
(g) Acquisition by donation or discovery.
(2) Some of these arrangements present special problems related to the cost to be recorded. For example, in utility accounting, interest during a period of construction has long been recognized as a part of the asset cost. Reference to an intermediate accounting manual will illustrate the recording of the acquisition of assets under the aforementioned acquisition arrangements. For the purpose of recording the fixed assets of utilities, the valuation of assets shall be based on historical cost.
(D) In addition, an asset register, whether prescribed form 211 or a computer equivalent, shall be maintained to provide a reasonable assurance that:
(1) Capital expenditures made by the town, its various departments and utilities are in accordance with the management’s authorization as documented in the minutes;
(2) Transactions of the utilities are recorded as necessary to permit the preparation of financial statements in conformity with generally-accepted principles;
(3) Adequate, detailed records are maintained to ensure accountability for town- and utility-owned assets;
(4) Access to assets is permitted in accordance with the management’s authorization; and
(5) The recorded accountability for assets is compared with the existing assets every year and appropriate action is taken with respect to any differences.
(Ord. 2019-13, passed 12-3-2019)