(A) A network of assets is composed of all assets that provide a particular type of service for government. A subsystem of a network of assets is composed of all assets that make a similar portion or segment of a network of assets.
(B) Composite depreciation refers to calculation of depreciation for a collection of similar assets. A single composite rate is applied annually to the acquisition cost of the collection as a whole. At year-end, an adjustment will be made to the total cost to account for any additions/disposals throughout the year. The accumulated depreciation associated with it will also be adjusted. A gain or loss will never be reported on the asset when using the composite method. A full year’s depreciation will be taken when the asset is placed in service and no depreciation will be recorded in the year it is sold or disposed of. Dissimilar assets will be grouped by useful lives.
(C) To determine the appropriate depreciation rate for the composite rate, divide one by the number of years the assets are depreciated. For instance, a group of assets with a 25-year life will be depreciated at 4% each year (1/25).
(D) The following is a list of asset groups and useful lives that will be used for depreciation purposes.
(1) Utilities.
(a) Street lights: 35 years;
(b) Traffic signals: 25 years;
(c) Flood walls/gates: 50 years;
(d) Roads: 50 years;
(e) Cement: ten years;
(f) Gravel: 15 years;
(g) Concrete: 30 years;
(h) Asphalt concrete: 20 years; and
(i) Brick or stone: 50 years.
(2) Sewer.
(a) Buildings and improvements: 50 years;
(b) Sewer lines: 50 years;
(c) Combined sewer overflow: 50 years;
(d) Lift station: 50 years;
(e) Treatment plant/equipment: ten years;
(f) Office equipment: five years;
(g) Miscellaneous operating equip-ment: five years; and
(h) Vehicles: five years.
(2014 Code, § A3.4(3))