AG 2006 08 21 - Laserfiche WebLink

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Subiect: Fixed Assets Purpose: Define the criteria for determining fixed assets for the County. Policy: A fixed asset is tangible in nature and has a useful life longer than one (1) year. A fixed asset is classified as land, land improvements, buildings, furniture and equipment, and vehicles and motorized equipment. It is the County's policy that items of insignificant value or value less than $5,000 are normally expensed instead of being considered a fixed asset. Local governments and public authorities are required by NC General Statute 159-26(b)(8) to maintain "a ledger or group of accounts in which to record the details relating to the general fixed assets of the unit or public authority," Classification of Fixed Assets Fixed assets owned by the County should be recorded in the accounting records. Accounting classifications of fixed assets are as follows: 1. Land A fixed asset account that reflects the value of land and the rights to land owned by the governmental unit. It includes all land held in fee simple and all rights to land that has no termination date, 2, Buildings and Building Improvements A fixed asset account that reflects the acquisition value of permanent structures owned by the County used to house persons and property. Permanently installed fixtures to or within these structures are considered parts of the stroctures. The costs of major improvements to structures are included in this account. 3. Land Improvements A fixed asset account that reflects the acquisition value of permanent improvements (other than buildings) that add value to the land or improve the use of the land. Examples of such improvements are: fences, retaining walls, draining systems, sidewalks, parking lots and driveways (Note that when used with fixed assets, the terms "improvement" and "betterment" have different meanings. "Improvements" are fixed assets permanently attached to the land. "Betterments" are additions to or changes in existing depreciable assets intended to increase their efficiency or prolong their useful lives.) Recording of public domain or infrastructure type fixed assets in the accounting records is optionaL This category of fix:ed assets includes roads, bridges, curbs and gutters, streets and sidewalks, drainage systems, and similar as,ets that are immovable and of value only to the County, 4, Equipment. V~hicles and Furniture A fixed asset account that reflects the value of tangible property not permanently affixed to real property, used in carryitt.g out the operations of the governmental unit. Examples of equipment are machinery, furniture and yehicles. 5. Construction in Progress A fixed asset ~ccount that reflects amounts expended on an incomplete building or other capital construction project. When the project is complete, the cumulative costs are transferred to another appropriate fixed asset account, Valuation of Fixed Ass~ts Fixed assets should be accounted for at cost or if the cost is not practicably determinable, at estimated historical cost. Donated fixed assets should be recorded at their estimated fair market value when received. Valuations considerations by category of fixed assets include: 1. Land (Account 9801) If the land is purchased, the valuation includes such costs as purchase price, legal fees, filling and excavation, arid other costs directly related to the acquisition of the land and its preparation for use. Rights. 22 F-8