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Home My WebLink About 19-92 Capitalizaton Threshold -Depreciation PolicyRESOLUTION 19-92 A RESOLUTION OF THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTIONE, COLORADO, ADOPTING THE CAPITALIZATION THRESHOLD AND DEPRECIATION POLICY FOR THE TOWN OF FIRESTONE WHEREAS, the Town of Firestone has previously adopted a capitalization threshold and depreciation policy for the Town; and WHEREAS, the Board of Trustees finds that such policy and procedures should be updated and that the adoption of the capitalization threshold and depreciation policy will promote and support the reporting of capital assets accurately and consistently; and WHEREAS, there has been presented to the Board of Trustees for adoption a proposed capitalization threshold and depreciation policy, which has been developed through the collaborative efforts of the Finance Committee, Town Manager and Department of Finance; and WHEREAS, the Board of Trustees finds that the adoption of such policy is authorized by law; and WHEREAS, the Board of Trustees finds that the proposed Capitalization Threshold and Depreciation Policy attached hereto and made a part of this resolution are solely in support of the Town's fiscal responsibilities; and WHEREAS, the Board of Trustees by this Resolution desires to adopt said policy; NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF TRUSTEES OF THE TOWN OF FIRESTONE, COLORADO: ecti n 1. The Board of Trustees hereby approves and adopts the Town of Firestone Capitalization Threshold and Depreciation Policy. Section 2. The Policy approved and adopted by this Resolution shall take effect October 9, 2019. ec i n 3. All resolutions and policies or portions thereof previously adopted that are inconsistent or conflicting with the policies adopted by this Resolution are hereby repealed to the extent of such inconsistency or conflict. 1 INTRODUCED, READ AND ADOPTED this 9th day of October, 2019. P u 1 ATTEST0(J(`( LCOA ya neuli41 j' Leah Vanarsdall, Town Clerlc BOARD OF TRUSTEES ADOPTED POLICY TOWN OF FIRESTONE SUBJECT: Capitalization Threshold and Depreciation Policy ISSUE DATE INTENT EFFECTIVE DATE The Town of Firestone (Town) understands the importance of being incompliance 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. POLICY 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 $5,000 or more and having a useful life in excess of one*Lv" +- -The cost of commissions, deliverv, setup, and or accessories should be included in the final cost of the capital asset. ® All capital assets shall be recorded and tracked via a perpetual inventory system. The Town will perform a physical inventory of its capital assets, either simultaneously or on a rotating basis, so that all of the assets are physically accounted for at least once every three years. The Town will develop capital asset replacement and maintenance schedules in accordance with accepted professional standards and best practices. The schedules will be utilized to commit adequate funding of re -investment in the Town's machinery, facilities, and infrastructure so as to prevent the deferment of requires m4oin4 maintenance and replacement. Depreciation of Capital Assets Page 1 of 2 For year-end financial statement purposes, the Town will calculate depreciation expense on its capital assets utilizing the straight line method over the following estimated useful lives: Infrastructure and Improvements 5-50 years Buildings and Improvements 10-50 years Machinery and Equipment 3-30 years The Town will not calculate depreciation expense in the year that the capital asset is purchased.: . . - - .... ; . - Policy Review The-r,.«.� r�„*<•�"�<•Finance Committee and Finance Director will be responsible for reviewing the Capitalization Threshold and Depreciation Policy every two years ip ^^N O+..O fl «40+11 the T�s yeaF end +mane i �+ +o.,,o ,+� air®T3 pi$E��sto €nsur-e that the T <,,, il,o,.; .,<<„-, ++L�n�n�o�erl- ,,+i;,,oa ;, +>1;� no and will make recommendations for revisions to the policy as deemed appropriate.- Furth�oT��he T- ATV A, iIx TI eaYYII �ont�"eFr v Adoption and modifications to this policy will require the approval of a simple majority vote by the entire Town Board. - 0IV tr ��^ �� C41AIA Nlwyor �OUNNO Attest: Town Clerlc Page 2 of 2 BOARD OF TRUSTEES ADOPTED POLICY TOWN OF FIRESTONE SUBJECT: Capitalization Threshold and Depreciation Policy ISSUE DATE EFFECTIVE DATE October 9, 2019 October 9, 2019 INTENT 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. POLICY 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 Pj, 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 will develop capital asset replacement and maintenance schedules in accordance with accepted professional standards and best practices. The schedules will be utilized to commit adequate funding of re -investment in the Town's machinery, facilities, and infrastructure so as to prevent the deferment of required ongoing maintenance and replacement. Page 1 of 2 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: Infi•astructure 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. Policy Review The Finance Committee and Finance Director will be responsible for reviewing the Capitalization Threshold 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. or ® Attest: Town Clerk �O ANT Page 2 of 2