(A) Purpose. The purpose of this policy is to facilitate the preparation of financial statements in conformity with generally accepted accounting principles.
(B) Classification of assets. Capital assets are personal and real property used in the operations of the county that have an expected estimated useful life beyond a single period. Capital assets are to include any item that falls into one of the following categories:
(1) Land;
(2) Building and building improvements;
(3) Machinery and equipment;
(4) Vehicles;
(5) Computer software;
(6) General infrastructure (roads, bridges, and rights-of-way); and
(7) Construction in progress.
(C) Capitalization thresholds.
(1) To be considered a capital asset for financial reporting purposes, an item must be at, or above, the capitalization threshold, and have a unit historical cost of $10,000 or more.
(2) The capitalization threshold for the following classes of assets shall be:
(a) Machinery, equipment, and vehicles: $10,000;
(b) Buildings and building improve-ments: $100,000;
(c) General infrastructure improve-ments: $200,000; and
(d) Computer software: $50,000.
(3) With regard to improvements and buildings, and general infrastructure, a capital outlay must be significant and increase capacity, increase efficiency, or extend the asset’s estimated useful life beyond the original expectation.
(4) A change in capacity increases the level of service provided by the asset. A change in efficiency increases the level of service but without increasing the size of the asset, or the change maintains the same level of service at a lower cost.
(D) Depreciation method/convention. Depreciation will be calculated using the straight-line method and full-year convention. No salvage value or residual value will be recognized.
(E) Retirements.
(1) Retirements apply to all capital assets including land, buildings, machinery and equipment, vehicles, and general infrastructure.
(2) When an asset is disposed of, scrapped, sold, subject to demolition, and the like, it is to be removed from the property record, and the appropriate reduction will be made to historical cost, accumulated depreciation, and net book value amounts.
(3) Retirements will reflect the actual historical cost of the asset when the amount is ascertainable. When historical cost is not ascertainable, an estimated historical cost will be determined.
(F) Responsibility for property record maintenance.
(1) The County Auditor will ensure that reporting for capital assets is being exercised by establishing a capital asset inventory, both initially and periodically, in subsequent years. The County Auditor will further ensure that the capital asset report will be updated annually to reflect improvements, additions, retirements, and transfers, and to reflect the new annual capital asset balance for financial reporting purposes, and the annual and accumulated depreciation calculations and net book value amounts.
(2) Day-to-day stewardship of personal property above the capitalization threshold of $5,000 is the expressed responsibility of the department utilizing the property.
(3) For annual updating of the capital asset report, the departments have the responsibility to report improvements, additions, retirements, and transfers in detail to the County Auditor. It is expected that this reporting will be in a timely manner, as the capital asset record must be updated annually.
(G) Property control.
(1) Capital assets below the capitalization threshold of $5,000 on a unit basis, but warranting control, shall be inventoried at the department level, and an appropriate list will be maintained. Data elements are to include asset description, location, make, mode, serial number, and other information that assists control or deemed relevant.
(2) The assets below the capitalized threshold, but considered sensitive, may include, for example, weapons, radios, personal computers, laptop computers, printers, fax machines, and small power tools. These minor, but sensitive, items shall be inventoried and controlled at the department level.
(3) The County Auditor shall determine appropriate means, level of detailed data elements, and the system to be utilized.
(4) Finally, the County Auditor shall have the right to request copies of the inventory and/or updated inventory of controllable items so as to periodically review the information and adhere to policy.
(Res. 2019-24, passed 6-11-2019)