DIDA-FIXED ASSET POLICY

FILE: DIDA

FIXED ASSET POLICY

This RSU #11 Policy establishes the minimum cost value (capitalization amount) that shall be used to determine the capital assets, including infrastructure assets, that are to be recorded in the District’s annual financial statements in order to comply with the requirements of GASB Statement No. 34.

This Policy also addresses other considerations for recording and depreciating fixed assets in order to comply with the provisions of GASB Statement No. 34.

Capital Asset Definition
Capital assets will be defined as tangible and intangible assets that have initial useful lives that extend beyond a single reporting period or improvements or betterments that extend the useful life of the capital asset beyond a single reporting period.

Capitalization Method
All capital assets will be recorded at historical cost as of the date acquired or constructed. If historical cost information is not available, assets will be recorded at estimated historical cost by calculating current replacement cost and deflating the cost using the appropriate price-level index.

Capitalization Thresholds
The Unit establishes the following minimum capitalization thresholds for capitalizing fixed assets:

Land and improvements $ 25,000
Buildings and improvements $ 50,000
Machinery/equipment/vehicles $ 5,000
Infrastructure $150,000

Detailed depreciation records shall be maintained for all fixed assets above the established thresholds.

Infrastructure Assets
In accordance with GASB Statement 34, the Unit will record, at a minimum, “major” infrastructure assets as defined in Statement 34 that were acquired, constructed or significantly reconstructed, or that received significant improvements after June 30, 1980. Other infrastructure assets may be capitalized as deemed appropriate. The Unit does not intend to use the “modified approach” to record infrastructure.

Other Assets

Detailed records shall be maintained at the discretion of the Business Manager for all items below the capitalization thresholds that should be safeguarded from loss. These items will be part of the annual physical inventory discussed below. These items may include computer equipment that fall below the established thresholds and any other assets specified by the Business Manager.

Depreciation and Useful Life

The Business Manager will assign an estimated useful life to all assets for the purposes of recording depreciation. The attached “Suggested Useful Lives” schedule will be used to establish lives for most assets. Asset lives will be adjusted as necessary depending on the present condition and use of the asset and based on how long the asset is expected to meet current service demands. Adjustments should be properly documented. Depreciation will be recorded based on the straight line method using actual month convention and depreciated down to the assets salvage value.

Safeguarding and Controlling Fixed Assets

The Business Office will maintain a database of fixed asset and update on an ongoing basis for current additions and deletions. A physical inventory will be taken annually on or about June 30 and compared to the physical inventory records. The results will be forwarded to the Business Office where appropriate adjustments will be made to the fixed asset records.

Adopted: March 3, 2005

Revised: December 6, 2005; May 6, 2010