Loading...
POL: 2007 FIXED ASSET CAPITALIZATION POLICY RESOLUTION 03-2001 FIXED ASSET CAPITALIZATION POLICY WHEREAS, Jefferson County is presently providing adequate documentation for current fixed asset purchases, assets purchased prior to 1985 are not adequately supported by historical cost documentation; and, WHEREAS, these assets purchased prior to 1985 make up a significant portion of total County fixed assets; and, WHEREAS, adequate accounting records of fixed assets are necessary to permit financial reporting in conformity with generally accepted accounting principles; and, WHEREAS, such adequate accounting records are also necessary to help assure that the County's plant, property, equipment, and other fixed assets are adequately safeguarded and accounted for; and, WHEREAS, such adequate accounting records would also enhance efforts to obtain optimum insurance levels and provide important proof-of-loss evidence when insurance claims are filed; and, WHEREAS, a Capitalization Policy has been devised to provide the safeguarding of the County's Assets as follows: GENERAL FIXED ASSETS A. GENERAL CRITERIA FOR NEW ACQUISITIONS 1. Assets acquired by governmental funds a. Useful life more that one year b. Acquisition cost or market value at date of acquisition of$15,000.00 or greater, regardless of class of item (building, machinery, etc.) 2. Assets acquired by Enterprise funds a. Useful life more than one year b. Acquisition cost or market value at date of acquisition of$15,000.00 or greater, regardless of class of item (building, machinery, etc.) B. CRITERIA FOR ADDITIONS AND BETTERMENT TO EXISTING FIXED ASSETS 1. Significantly expand an item's usefulness 2. Cost of$5,000.00 or more. 3. A major repair that does not significantly expand the usefulness of an asset is a repair and should be recorded in financial records as such (i.e. object code 350, not 900). Small building remodels that do not increase useable square footage are classified as maintenance. Remodels that improve building efficiency such as total window replacements will be capitalized. Caulking all the windows will not. Replacing carpet and repainting are maintenance costs. 4. Enterprise funds will capitalize major repairs if they significantly extend an assefs life, the procedures in (1) above will be followed. C. DEPRECIATION 1. Assets recorded in the General Fixed Asset Account Group will not be depreciated. 2. Assets in the Enterprise fund will be depreciated using the straight line method. A full year's depreciation will be taken during the fiscal year in which the asset was acquired. D. ASSIGNING VALUES TO GENERAL FIXED ASSET ITEMS 1. Actual or estimated historical cost at acquisition date, if contributed, then fair market value at acquisition date. a. Estimated costs will be derived from an estimate of original cost based on a current cost of reproduction new, indexed by a reciprocal factor to date acquired or as near to it as can be determined. Current catalogs for replacement cost will be utilized in this process. II CONTROLLED ASSETS A. These assets will not qualify as a general fixed asset. The cost will be between $100.00 and $15,000.00 and they will have a useful life of more than one year. (I.e. object code 216, small items of equipment and 217, small tools.) III. REQUIRED REPORTS A. Reports required for external financial reports and internal management reports. 1. External reports will include a summary of general fixed assets, reported by major asset class as well as a summary of changes to asset class. (Land, buildings, machinery and equipment, etc.) 2. Internal reports will be used to monitor controlled assets. a. For asset management and safeguarding. IV STANDARDIZED FORMS A. A fixed asset form will be required whenever an asset is purchased. The form will require: a. Department b. Date of purchase c. Description of fixed asset d. Model number e. Serial number f. Vendor purchased from B. The original claim and invoice will be used to obtain as much information as possible, but additional information may be requested from the department heads. C. A fixed asset form will be required whenever an asset is discarded, destroyed, loaned, given or moved to another department. The form will require: a. Department b. Date c. Description of equipment d. County Tag Number e. Disposition of equipment V. Periodic Inventories will be taken by someone outside the department to determine the reliability of the County's inventory. VI. Each department is responsible for their fixed assets. NOW,THEREFORE, BE IT RESOLVED that this Board of County Commissioners hereby adopt the foregoing Capitalization Policy as the Capitalization Policy for Jefferson County, Montana,in order to assure safeguarding the County's fixed assets. Dated this 24th day of January, 2001. ATTEST: (77 ( `r; .nN. 2 .4/ i BONNIE RAMEY (7. SAM SAMSON,CHAIR CLERK AND RECORDER �%,. SHERRYgARGILLCOMMISSIONER r TOM LYTHGOE, COMMISSIONER