(A) The method of acquisition of a capital asset is not a determining factor. Each department shall report capital assets acquired by any of the following:
(1) Regular purchases.
(2) Construction by Town personnel.
(3) Construction by an outside contractor.
(4) Resolution/Condemnation.
(5) Donation/Contribution.
(6) Addition to an existing asset.
(7) Transfer from another department.
(8) Trade/Barter.
(9) Annexation.
(10) Lease Purchase.
(B) Leased equipment should be capitalized if the lease agreement meets any one of the following criteria:
(1) The lease transfers ownership of the property to the lessee by the end of the lease term.
(2) The lease contains a bargain purchase option.
(3) The lease term is equal to 75% of the estimated economic life of the leased property.
(4) The present value of the minimum lease payments at the inception of the lease (excluding executory costs) equals at least 90% of the fair-value of the leased property.
(C) Leases that do not meet any of the above criteria are considered operating leases.
(Ord. 54-2022, passed 12-19-2022)