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HomeMy WebLinkAbout26-14 Adopting the Town Capitalization and Depreciation Policy 02-18-2026RESOLUTION NO. 26-14 A RESOLUTION OF THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO, ADOPTING THE TOWN OF FIRESTONE CAPITALIZATION AND DEPRECIATION POLICY WHEREAS. the Town of Firestone has previously adopted the Capitalization and Depreciation Policy for the Town; and WHEREAS, the Board of Trustees finds that such Policy should be updated and that the adoption of a current Capitalization and Depreciation Policy will promote and support the efficient and effective use of Town resources and promote the best interests of the Town; and WHEREAS, there has been presented to the Board of Trustees for adoption a proposed Capitalization and Depreciation Policy, which has been developed through the collaborative efforts of the Interim Town Manager, Director of Finance and Finance Committee; and WHEREAS, the Board of Trustees finds that the proposed Capitalization and Depreciation Policy is solely in support of the Town's fiscal responsibilities; and NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: Section 1. The Board of Trustees hereby approves and adopts the Town of Firestone Capitalization and Depreciation Policy, in substantially the same form as the copy attached hereto and made a part of this resolution. Section 2. All prior Capitalization and Depreciation Policies or amendments thereof adopted by the Town are repealed in their entirety. INTRODUCED, READ, and ADOPTED this 18`" day of February, 2026. ATTEST: Li (laM Missy Carranco, eputy Town Clerk APPROVED AS TO FORM: Marshall Keith Ma in, Town Attorney TOWN OF FIRESTONE CAPITALIZATION AND DEPRECIATION POLICY ADOPTED FEBRUARY 2026 The Town of Firestone (Town) understands the importance of being in compliance with generally accepted accounting principles as established by the Governmental Accounting Standards Board (GASB) by reporting capital asset information in the Town's year-end government -wide financial statements. Reporting capital asset activity accurately and consistently, provides the readers of the Town's audited financial statements an economic measurement focus of the Town's position. The Town has established the following fiscal policy related to capitalization thresholds and capital asset depreciation method. CAPITALIZATION THRESHOLD _. The monetary threshold for capitalization purposes will be established for capital assets with an initial, individual cost of $10,000 or more and having a useful life in excess of one year. • The cost of commissions, delivery, setup, and or accessories should be included in the final cost of the capital asset. All capital assets shall be recorded and tracked via a perpetual inventory system. The Town will perform a physical inventory of its capital assets, either simultaneously or on a rotating basis, so that all of the assets are physically accounted for at least once every three years. The Town has developed a Fleet Purchase/Surplus Policy in accordance with accepted professional standards and best practices. This policy is utilized to commit adequate funding of re -investment in the Town's machinery, vehicles and equipment, so as to prevent the deferment of required ongoing maintenance and replacement. DEPRECIATION OF CAPITAL ASSETS For year-end financial statement purposes, the Town will calculate depreciation expense on its capital assets utilizing the straight line method over the following estimated useful lives: Infrastructure and Improvements 5-50 years Buildings and Improvements 10-50 years Machinery and Equipment 3-30 years The Town will not calculate depreciation expense in the year that the capital asset is purchased. Page 1 of 2 POLICY REVIEW The Finance Committee and Finance Director will be responsible for reviewing the Capitalization and Depreciation Policy every two years and will make recommendations for revisions to the policy as deemed appropriate. Adoption and modifications to this policy will require the approval of a simple majority vote by the entire Town Board. Don C yac J ., or CA. Mapco Missy Carranco. Deputy Town Clerk Page 2 of 2 FIRESTONE COLORADO MEMORANDIUM OF RECOMMENDATION TO: Board of Trustees FROM: Finance Committee DATE: January21, 2026 RE: Capitalization Policy The proposed Capitalization Policy has been reviewed by the Finance Committee at the January 21, 2026 meeting. With a vote of, for and O against,the Finance Committee of the Town of Firestone recommends the approval of the Capitalization Policy. FINANCE OMMITTEE Frarfr< A. Jimenez, it f.. A EST: Missy Carranco, Secretary