It is important to the maintenance of accurate records that each asset category be precisely defined and that all persons responsible for records maintenance be fully aware of the categorization system. This section further clarifies the asset definition by major category.
(A) Land.
(1) The county will capitalize all land purchases or land donations. All land purchases shall be capitalized with the actual cost of purchase or if unavailable, the estimated historical cost. This includes all specified land, easements, right-of-ways, lots, parcels owned by the governmental unit or its various departments, boards or authorities, regardless of the method of acquisition. This includes land purchased outright as an easement or right-of-way to infrastructures. All costs of legal services incidental to the acquisition of land, costs relating to the razing for the structure, and other charges incurred in preparing the land for use are capitalized and carried in the land account. Donated land will be capitalized at the fair market value at the time of the donation.
(2) All properties obtained through tax sale including but not limited to land, buildings, land improvements, and building improvements shall be considered to have no dollar value and will be excluded from reporting as they are considered property that is being held for resale.
(B) Buildings.
(1) The county will capitalize all buildings at the purchase price or construction cost. Buildings are all structures designed and erected to house equipment, services or functions. This includes systems, services, and fixtures within the buildings, and attachments such as porches, stairs, fire escapes, canopies, areaways, lighting fixtures, flagpoles, and all such units that serve the building. Plumbing systems, lighting systems, heating, cooling, ventilating and air handling systems, alarm systems, sound systems, surveillance systems, passenger and freight elevators, escalators, built-in casework, walk-in coolers and freezers, fixed shelving, and other fixed equipment are included with the building. Communication antennas and/or towers are not included as buildings. These are parts of the equipment units they serve.
(2) Additions, improvements, and leasehold improvements to the building as well as the cost of the heating and ventilating system or other permanently attached fixtures should be capitalized when these costs are considered betterments. These improvements or renovations to the buildings will be capitalized in the county if the total cost is $5,000 or greater. Replacement of a building roof or heating and cooling system will be capitalized when the cost of the item is $20,000 or greater.
(3) Donated buildings will be capitalized using the market value of the building at the time of the donation. Building purchases made using the federal or state funding shall follow the appropriate funding source guidelines and the county capital asset policy.
(C) Improvements other than buildings. The county will capitalize improvements other than buildings in the following manner:
(1) Improvements such as excavation, non-infrastructure utility installation, driveways, parking lots, flagpoles, sidewalks, retaining walls, and fencing shall be capitalized when the cost of the item is $20,000 or greater.
(2) Milling and paving of an existing parking lot shall be considered maintenance rather than a capital asset.
(3) Improvements other than buildings will be capitalized at the actual cost of the improvement. If the actual cost is unavailable, the improvement will be capitalized using its current replacement cost, estimated date of purchase, and the Indiana Board of Accounts factoring table to determine the estimated historical cost.
(4) The county department heads shall report to the County Auditor any improvements other than buildings which their respective departments authorized that cost $20,000 or greater.
(5) Donated improvements other than buildings will be capitalized at the fair market value at the time of the donation.
(D) Construction work in progress. The county will capitalize actual amounts expended on an uncompleted building or other capital construction project. Once the project is completed, the cumulative costs are transferred to the appropriate permanent fixed asset account.
(E) Machinery and equipment.
(1) The county will capitalize all machinery and equipment at the purchase price or actual cost. The cost of the asset acquired when payment includes both cash and a trade-in, is the sum of the cash paid plus the fair market value of the asset traded in. If the fair market value of the asset being traded in is not readily determinable, cost may be recorded as the cash paid plus the book value (asset cost minus accumulated depreciation) of the asset traded in.
(2) Equipment includes all types of physical property within the scope of the capital asset policy for the county not previously classified. Included in this category are office mechanical equipment, office furniture, appliances, furnishings, machinery items, maintenance equipment, communication equipment, police, fire, sanitation, Park Department equipment, laboratory equipment, vehicles, road and highway equipment, aircraft, EMS and emergency equipment, earth moving equipment, text equipment, civil defense and emergency equipment, and data processing equipment. All supplies are excluded.
(3) The county shall capitalize all machinery and equipment items with an actual cost or estimated cost of $5,000 or greater. Attachments to machinery and equipment will be capitalized if purchased at the same time as the equipment item. Attachments that are purchased separately from a given equipment item will be capitalized separately from the item if they are purchased at a time other than when the original item was purchased and have a cost of $5,000 or greater.
(4) Items which extend the useful life of the equipment shall be capitalized. Department heads should report to the County Auditor the description, year completed, funding source and dollar amount. An example would be the purchase of a motor for a vehicle. This does not include the normal maintenance costs or supplies.
(5) Donated machinery and equipment will be capitalized at the fair market value at the time of donation.
(F) Infrastructure.
(1) The county will capitalize all county-owned roads and bridges. All county roads and bridges will be capitalized at original cost or historical estimated cost. Infrastructure assets are long-lived capital assets that normally can be preserved for significantly greater number of years than most capital assets and that are normally stationary in nature. Infrastructure assets include roads, bridges, streetlights, traffic signals, drainage systems and water systems. Maintenance and repairs will be considered as necessary to maintain the existing asset and therefore are not capitalized. Examples such as patching, resurfacing, milling, chip sealing, and snow removal shall be considered maintenance activities and will be expensed. Additionally, normal department operating activities such as feasibility studies, and primary engineering and design will be expensed and not capitalized as an element of the infrastructure asset.
(2) Gravel roads that are paved shall be considered a capital asset. County roads that are redesigned or re-engineered beyond maintenance activities such as paving, milling, or chip sealing shall be considered a capital asset. Roads that are accepted by the Board of Commissioners and the Highway Department from developers or owners shall be capitalized at the market value at the time of the donation.
(BC Ord. 2019-0042, passed 12-2-2019)