HomeMy WebLinkAbout23-86 Adopting Capitalization and Depreciation Policy 08-23-2023RESOLUTION NO. 23-86
A RFSOLUTION OF THE BOARD OFTRUSTEES OFT UETOWN OF
FIRESTONE, COLORADO, ADOPTING THE TOWN OF FIRESTONE
CAPITA Ll ZATION AND DEPRECIATION POLICY
WHEREAS, the 'l'own of Firestone has previonsly adopted the Capitalization and
Depreciation PolicyfortheTown. and
WHERFAS, the Board ol"J"rUSIces finds that such policy should be updated and that the
adoption ol'a current Capitalization and Depreciation policy will prornote and support the efficient
,aid effective use of Town resources and prornote the best interests ofthe FoNvn; and
W I 1E'RFAS. there has been presented to the Board (,,)f Trustees for adoption a proposed
Capitalization and Depreciation Policy, which has been developed through the collaborative effirrts
of the Town Manager, Director ot'Finance and consultants: and
WHEREAS, the Board of Trustees finds that the proposed Capitalization and Depreciation
PolieN, is solely in support of the `Fown*s fiscal responsibilities; and
NOW r]-JEREIFORE. 1311' IT RESOLVE,D BY 'HIE BOARD OF TRUSTI"ES OF
THE FOWN OF FIRESTONE COLORADO:
Section I . The Board of Trustees hereby approves and adopts the Town of Firestone
Capitalization and Depreciation Policy, ill Substantially the sarne form as the copy attached hereto
and made a part of this resolution.
Section 2. All prior Capital ization and Depreciation policies or amendments thereof
adopted by theTown are repealed in their entirety,
INTRODUCED, READ, and ADOPTED this 23rd day of" August, 20-23
XFFES'L�
rist'i K ffils-hor ownCler-
M
RADO
TOWN'OF FIRESTONE
CAPITALIZATION AND DEPRECIATION POLICY
ADOPTED AUGUST 2023
'I'lie 1'own of Firestone (Town) understands the importance of being in compliance with generally
accepted accounting principles as established by tire Governmental AccOUnting Standards Board
(GASB) by reporting capital asset information in theTown's year-end government -wide financial
statements. Reporting capital asset activity accurately and consistently, provides the readers orthe
Town's audited financial statements an econornte measurement fi.)cus of thc']'own*s position.'rhe
'fawn has established the following fiscal policy related to capitalization thresholds and capital
asset depreciation method.
CAPITALIZATIONTHRESHOLD
The monetary threshold for capitalization purposes will be established for capital assets with an
initial, individual cost of $5,000 or more and having a useful fite in excess of one year.
* The Cost Of C0111111issions. 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 systern. The 'fawn
will pe14brin 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.
* fhe 'l'own has developed a I'leet Purchase/Surplus Policy in accordance with accepted
professional standards and best practices. This policy is utilized to commit adequate funding
of re-hivestment, in the 'rown's machineryvehicles and equipment, so as to prevent the
d&rmcnt of required ongoing maintenance and replacement.
DEPRECIATI[ON OF CAPITAL ASSETS
l'or year-end financial statement purposes, the J'own will calculate depreciation expense on its
capital assets utilizing the straight line method over the l"ollowing estimated useint lives:
Infrastructure and Improvements 5-50 years
Buildings and Improvements 10-50 years
Machinery and FxqLtiprnern _')-,10 years
'file 'fown will not calculate depreciation expense in the year that the capital asset is purchased.
page 1 ol'2
POLICY REVIEW
The l"inance Conitriiace and Finance Director kvill be responsiblefor reviewing the Capitalization
and Depreciation Policy ever), two years and will make recommendatiows for revisions to the
policy as deerned appropriate. Adoption and modifications to this policy xvill require the approval
of a simple nutiority vote by the entircTown Board.
\ 091av, AL I
I
lAttest'. Kris"ti K Bashor. CNIC,'I'oNvn Clerk
M
Drew Peterson, Mayor
T. Board of Trustees
FROM: Finance Committee
CC:
DATE: August 16, 2023
1 Capitalization Policy
The proposed Capitalization Policy has been reviewed by the Finance Committee at the August 16, 2023
meeting. With a vote of 4 for and 0 against, the Finance Committee of the Town of Firestone
recommends the approval of the Capitalization Policy,
ATTEST:
�ecr, y Kri U K Bashor, Secretary
I
FINANCE aqM"T`FFf;
Frank k , Jimeqel, "Chair