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Policy DID
Capital Assets
School Board Approved: June 26, 2007
Background GASB 34:
The Governmental Accounting Standards Board (GASB) issued Statement No. 34 on June 30, 1999. GASB 34 significantly changed the way governments account and report financial information. This new reporting affects every public school organization that issues financial statements in accordance with generally accepted accounting principles (GAAP). Among the many new requirements, GASB 34 requires schools to capitalize and depreciate certain types of assets.
Policy Summary:
It is the policy of the Jaffrey-Rindge School District (the District) to: 1) Maintain adequate records of its material capital assets including: a) The cost to acquire, maintain and improve the capital asset, b) The costs associated with the usage (or depreciation) of the capital asset, and c) The costs associated with the disposal or retirement of the capital asset. 2) Report material capital assets in District’s financial reports, which are subject to the annual audit, in conformance with the generally accepted accounting principles.
Definitions and Concepts:
Capital Assets
Capital assets are property that have a significant cost and have a useful life in excess of one year. As defined by the Governmental Accounting Standards Board Statement No. 34, Basic Financial Statements - and Management’s Discussion and Analysis - for State and Local Governments (GASB 34), “. . . capital assets include land, … buildings, building improvements, vehicles, machinery, equipment, … infrastructure, and all other tangible or intangible assets that are used in operations . . . Infrastructure assets are long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. . . . Infrastructure assets include roads, bridges, tunnels, drainage systems, water and sewer systems, dams…”
Useful Life
Useful life means the estimated number of years that the asset will be able to be used for the purpose for which it was purchased by the District. Assets that are consumed, used-up or worn-out in one year or less should not be capitalized. Reference the Capital Asset Procedures Manual for a Schedule of Depreciation Lives.
Material Capital Asset
A material capital asset is an asset with an estimated useful life greater than one year that exceeds the District’s capitalization threshold.
Capitalization:
The process of recording the cost of the property, as an asset, on the Districtwide Balance Sheet and depreciating the asset over its useful life.
Depreciation:
In accounting terms, depreciation is the process of allocating the cost of the asset over a period of time (its useful life), rather than including the total cost as an expense in the year the asset was purchased, acquired, or constructed.
Policy:
Legal References:
GASB Statement No. 34
GASB Statement No. 34 Implementation Recommendations for School Districts by the ASBO International Accounting, Auditing and Budgeting Committee