[HISTORY: Adopted by the Town Council of the Town of South Berwick 6-28-2004.
Amendments noted where applicable.]
This policy is adopted to establish procedures for keeping an inventory
of fixed assets owned by the Town of South Berwick. It results from and is
intended to implement the Governmental Accounting Standards Board Statement
No. 34.
As used in this chapter, the following terms shall have the meanings
indicated:
Assets which meet the following minimum standards will be considered
"capital assets":
Having a value of $5,000 or more. This requirement can be for an individual
item in excess if $5,000 or for a "collection," such as a telephone system
or computer network system.
Having an estimated useful life of two years or more.
Major asset categories will be buildings and improvements, land and
improvements, machinery and equipment, vehicles, and infrastructure.
Purchases or other acquisitions of tangible assets meeting the definition of "capital asset" stated above shall be recorded as expenditures in the appropriate governmental fund and also be recorded as additions to the Town's Capital Asset Listing. All capital assets will be recorded at historical cost as of the date acquired or constructed, except for infrastructure, which is discussed in § 5-7. If historical cost information is not available, assets will be recorded at the estimated historical cost by calculating current replacement cost and deflating the cost using the appropriate price-level index.
The Town will capitalize outlays that increase future benefits from
an existing capital asset beyond its previously assessed value or condition
if they meet the Town's Capitalization Policy as stated above.
All assets included in the Town's Capital Asset Listing shall be subject
to depreciation, which shall be recorded annually. Depreciation shall be computed
using the straight-line method and half-year convention. All capital assets
shall have an estimated useful life and salvage value assigned based upon
the nature of the asset and the Schedule of Useful Lives. Asset lives will
be adjusted as necessary depending on the present condition, use of the asset
and how long the asset is expected to meet current service demands. Each entry
of the Capital Asset Listing shall include annual depreciation expense, accumulated
depreciation, estimated useful life assigned and salvage value (if any), along
with appropriate identifying and descriptive information and the date placed
in service.
The Town will capitalize the following items as collections: land, buildings,
computers, radios and pagers, art works and historical treasures, telephone
systems, and any other assets bought in bulk purchase that meet the Capitalization
Policy as stated above.
General infrastructure assets are defined to be those immovable tangible
assets belonging to the Town, which are of no or little value to any party
other than the Town itself. This term includes items such as roads, bridges,
dams, storm drains and culverts. In accordance with GASB Statement Number
34, the Town will record, at a minimum, "major" infrastructure assets that
were acquired, constructed or significantly reconstructed, or that received
significant improvements, after June 30, 2003. Other infrastructure assets
may be capitalized as deemed appropriate. The Town does not intend to use
the "modified approach" to record infrastructure.
