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City of Kingston
Policies and Procedures
Financial Services Department
Tangible Capital Assets Policy
Administrator:
Chief Financial Officer
and City Treasurer
Approval Date:
July 20, 2010
Effective Date:
January 1, 2009
Next Review:
June 1, 2027
Approval Authority: Council
Revision Date:
July 18, 2016
(Resolution Carried:
June 7, 2016)
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Corporation of the City of Kingston
Tangible Capital Assets Policy
Table of Contents
Purpose ....................................................................................................................... 3
Definition of Tangible Capital Assets ........................................................................... 3
Measurement of Cost .................................................................................................. 4
Capitalization / Reporting Thresholds .......................................................................... 5
Bundling of Assets (Whole Asset vs. Component Approach) ...................................... 6
Pooling of Assets ......................................................................................................... 6
Donated and Contributed Assets ................................................................................. 7
Capital Works In Progress ........................................................................................... 7
Betterments vs. Maintenance ...................................................................................... 7
Leasehold Improvements ............................................................................................ 8
Capital Leases ............................................................................................................. 9
Amortization of Capital Assets ..................................................................................... 9
Write-Downs of Capital Assets .................................................................................. 10
Disposal of Capital Assets ......................................................................................... 11
Appendix A - Useful Life Estimates ......................................................................... 12
Appendix B - Definitions .......................................................................................... 17
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Purpose
1. The objective of this policy is to prescribe the accounting treatment for reporting
tangible capital assets so that users of the financial statements can discern
information about the City's investment in tangible capital assets and the ongoing
changes in this investment. The policy also ensures appropriate accountability with
respect to tangible capital assets and their reporting. The principal issues in
accounting for tangible capital assets include:
−
Recognition of the assets;
−
Determination of their carrying amounts;
−
Amortization charges;
−
Recognition of disposals; and
−
Recognition of impairment losses.
2. The primary reference for this policy is the Canadian Institute of Chartered
Accountants Public Sector Accounting Handbook Section PS3150 ("PS3150"),
which must be adopted by all Canadian Municipalities effective January 1, 2009.
Definition of Tangible Capital Assets
3. The Canadian Institute of Chartered Accountants Public Sector Accounting
Handbook Section PS1000 defines assets as:
Economic resources controlled by a government as a result of past transactions or
events and from which future economic benefits may be obtained. (PS 1000.35)
Non-financial assets are acquired, constructed or developed assets that do not
normally provide resources to discharge existing liabilities, but instead:
−
are normally employed to deliver government services;
−
may be consumed in the normal course of operations; and
−
are not for sale in the normal course of operations. (PS 1000.42)
Tangible Capital Assets are defined in PS3150 as non-financial assets having
physical substance that:
−
Are held for use in the production or supply of goods or services, for
administrative purposes, or for the development, construction,
maintenance or repair of other tangible capital assets;
−
Have a useful life extending beyond one fiscal year and are intended to
be used on a continuing basis;
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−
Represent future economic benefits that are expected to be realized;
−
Are not intended for resale in the ordinary course of operations; and
−
Are economic resources whereby beneficial ownership and control clearly
rest with the City.
Before an item is recognized as a tangible capital asset for financial reporting
purposes, it must satisfy two criteria:
(i) It must satisfy the definition of a tangible capital asset.
(ii) It must have a cost or other value that can be reliably measured - Items
whose value is not measurable or reasonably estimable cannot be
recognized within the financial statement totals.
4. The definition of tangible capital assets does not include:
(i) Intangible assets such as copyrights, trademarks, or patents;
(ii) Obsolete and surplus items;
(iii) Heritage assets, usually irreplaceable, that are intended to be preserved
in trust for future generations, such as:
−
Museum and gallery collections and other works of art;
−
Archeological sites, ruins, burial sites, monuments and statues; and
−
Historical buildings greater than 100 years in age which remain
historical in nature in that there have been essentially no significant
betterments over time.
5. The City's tangible capital assets are divided into two broad classifications -
infrastructure assets and general capital assets. Infrastructure assets are defined
as linear (connected) systems, such as roads, sidewalks, and water, sewer and gas
systems. Infrastructure assets also include the plants (water treatment and sewer
treatment) that support and are connected to linear systems. General capital assets
are defined as standalone assets such as land, buildings, vehicles and equipment.
Appendix B provides a further breakdown of the City's asset categories within each
of these classifications.
Measurement of Cost
6. For purposes of reporting tangible capital assets, all costs required to make a
capital asset operational are to be recorded. Costs to capitalize include the
purchase price and other acquisition costs such as installation costs, design and
engineering fees, legal fees, survey costs, site preparation costs, freight charges,
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transportation insurance costs and duties. The cost of a constructed asset would
normally include direct construction or development costs (such as materials and
labour) and overhead costs directly attributable to the construction or development
activity (such as the costs of leased space used solely for the construction or
development activities). Any non-refundable portion of taxes applicable to capital
asset purchases will also be capitalized.
7. When two or more assets are acquired for a single purchase price, it is necessary to
allocate the purchase price to the various assets acquired. Allocation should be
based on the fair value of each asset at the time of acquisition or some other
reasonable basis if fair value is not readily determinable. Example: land and building
purchased together.
8. Short-term interest expense related to financing costs incurred during the time an
asset is under construction will not be capitalized. The City's current policy will
remain in place whereby all short-term interest costs during project construction will
be charged directly to the applicable capital reserve fund.
Capitalization / Reporting Thresholds
9. The City has determined a capitalization/reporting threshold for each asset
category, the value below which costs will not be capitalized for financial statement
reporting purposes. Assets below the relevant threshold will be expensed in the
period of purchase and those above the threshold will be recognized as tangible
capital assets for reporting purposes and amortized at the appropriate rate. The
table below provides a summary of the City's capitalization/reporting thresholds for
each asset category.
City of Kingston
Capitalization / Reporting Thresholds
Land
Capitalize all
Land Improvements
$
10,000
Buildings
$
10,000
Vehicles and Machinery
$
10,000
Furniture, Fixtures and Equipment
$
10,000
Linear Assets
Capitalize all
Pooled Assets (Pool Threshold)
$
200,000
Capital Works in Progress
Capitalize all
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Bundling of Assets (Whole Asset vs. Component Approach)
10. Capital assets which contain multiple parts can be accounted for using either the
whole approach or the component approach. In certain circumstances, it is
appropriate to allocate the total disbursement on an asset to its component parts
and account for each component separately. This is the case when the component
assets have different useful lives or provide economic benefits or service potential
to the entity in a different pattern, thus necessitating use of different amortization
rates and methods.
(a) The Whole Asset Approach considers an asset to be an assembly of
connected parts. Costs of all parts would be capitalized and amortized as one
asset. For example, a building would be considered as one asset inclusive of
the building and building equipment.
(b) Under the Component Approach, different components are individually
capitalized and amortized using different rates based on relative useful lives.
Under this approach, the various components within a specialized building
such as a water treatment plant are recorded as individual assets and may
include a variety of components for different equipment groups.
11. The City has determined that the following capital asset categories will be
accounted for using the component approach. All other capital assets containing
multiple components will be valued using the whole approach.
(a) Buildings (*) (components to include building, building equipment)
(b) Roads and airport runways (base separate from surface)
(c) Water treatment plants (components to include building, building fixtures,
electrical equipment and mechanical equipment)
(d) Waste water treatment plants (components to include building, building
fixtures, electrical equipment and mechanical equipment)
(e) Arenas (components to include building, building equipment, ice equipment)
(*) Initial valuation of building assets on hand at December 31, 2007 will utilize the
whole asset approach unless component information is readily available.
Pooling of Assets
12. Certain items may individually be below a capitalization threshold but are typically
purchased or held in large quantities and thus represent significant assets in
aggregate. In such cases, the City will capitalize all items acquired in a given asset
class or pool and amortize the pool over a pre-determined amortization period. An
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asset pool is a group of identical or similar tangible capital assets which are
accounted for and reported on as though they were a single asset.
There are a number of different City asset categories that are subject to pooling
(predominantly by year of purchase). On-going accounting for asset pools will
involve adding each year's additions to the pool, removing one year of fully
amortized assets from the pool, along with related accumulated amortization, and
calculating the annual amortization by year of purchase. It is assumed that assets
that are fully amortized have been disposed each year. See Appendix A for a listing
of all City pooled assets.
Donated and Contributed Assets
13. The City may receive donations or contributions of tangible capital assets. Donated
or contributed capital assets or capital assets acquired at nominal values will be
valued for capital asset reporting purposes at their fair value at the date of
contribution. The offsetting credit will be reported as revenue in the year of transfer.
The City has defined nominal value as consideration paid of $10 or less. For
example, assets may be transferred from senior levels of government at no or
nominal cost or development agreements may require developers to provide
tangible capital assets such as roads, sidewalks and street lighting which are
assumed by the City upon completion.
Capital Works In Progress
14. Capital works in progress represent the construction or development of a capital
asset that extends over the City's fiscal year end. For annual reporting purposes,
all capital projects that are not yet put into use and that extend over a municipality's
fiscal year end, will be reported as capital works in progress in the annual financial
statements. When the asset is put into use, the costs will then be transferred to the
appropriate tangible capital asset account and amortization will begin.
For accounting purposes, the City will continue to maintain its capital fund and
continue to track capital expenditures by program. All open programs, at any point
in time, will represent the City's works-in-progress and will continue to be reported
to council on a quarterly basis.
Betterments vs. Maintenance
15. Ongoing expenditures relating to existing tangible capital assets can be classified
as either "betterments" or "repairs and maintenance". Betterments, which are
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normally capitalized, improve the functionality (or service potential) of the asset or
increase the useful life of an asset. Service potential may be enhanced when:
−
There is an increase in the previously expected service capacity;
−
The useful life of the asset is extended beyond its previously expected life
span;
−
The service output quality is improved;
−
The associated operating costs are lowered.
Repairs and maintenance, which are normally expensed, primarily maintain the
existing functionality of the asset. Where a cost cannot easily be differentiated
between a repair and a betterment, the cost should be expensed.
16. The total cost of betterments is capitalized as part of the cost of the capital asset to
which it relates and is amortized over the remaining useful life of the asset, taking
into account any extension of the related asset's useful life that may be provided by
the betterment. In some circumstances, the useful life of the betterment may be
significantly shorter than that of the asset, and, in those cases, should be
capitalized and amortized separately.
Leasehold Improvements
17. A leasehold improvement is defined as a betterment made to leased property (not a
property owned by the city). Betterments are expenditures relating to the alteration
or modernization of an asset that appreciably prolong the item's period of
usefulness or improve its functionality.
18. To be considered a leasehold improvement, the modification must have at least four
characteristics:
(a) The modifications must be made to assets that have been leased;
(b) The City must pay for the improvements. If the expenses are the responsibility
of the lessor then the lessor will account for the expenses in its own records;
(c) The leasehold improvements should be durable, they should generate benefits
to the City for more than one year; and
(d) The betterment reverts to the lessor at the end of the lease (i.e. cannot be
detached from the leased property).
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Capital Leases
19. A capital lease is a lease with contractual terms that transfer substantially all the
benefits and risks inherent in ownership of property to the City. For substantially all
of the benefits and risks of ownership to be transferred to the lessee, one or more of
the following conditions must be met;
(a) There is reasonable assurance that the City will obtain ownership of the leased
property by the end of the lease term.
(b) The lease term is of such duration that the City will receive substantially all of
the economic benefits expected to be derived from the use of the leased
property over its life span.
(c) The lessor would be assured of recovering the investment in the leased
property and of earning a return on the investment as a result of the lease
agreement.
20. Assets which are subject to capital leases are recorded as capital assets and are
subject to the policies outlined above.
Amortization of Capital Assets
21. The cost of tangible capital assets is essentially a long-term prepayment of an
expense in advance of the use of the asset. As the economic service life of the
asset expires, the cost of the asset is systematically allocated to operations as an
expense called "amortization".
22. Periodic amortization expense should be an allocation of the historical cost of the
asset, less expected salvage value, if applicable and/or available, to operations in
proportion to the economic benefits received each period from the use of the asset.
23. The service life of an asset should be determined on a basis that is linked with the
expiration of the economic benefits and should be standardized among groups of
like and similar assets.
24. The City will use estimated service life measured in years as an appropriate
measure for all amortization calculations. This measurement provides a rational
and systemic method of calculating the cost of use for all the City's asset classes.
25. The maximum amortization period will be limited to 75 years unless it can be clearly
demonstrated that the useful life of the asset is reasonably expected to exceed 75
years.
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26. Appendix A to this policy provides a comprehensive listing of all asset types
included in the City's capital asset inventory and their respective useful life
estimates. It also provides information on the asset types that utilize asset pools.
27. The amortization of City assets will be calculated on a straight-line basis for all
asset categories. Amortization will be estimated annually, based on prior year
calculations and recorded on a monthly basis. Estimated amounts will be adjusted
to actual at year end to account for current year additions and disposals. One half
of the annual amortization rate will be applied to assets that are purchased or
disposed of during the year, similar to the half-year rule as defined by Canada
Revenue Agency.
Write-Downs of Capital Assets
28. When conditions indicate that a tangible capital asset no longer contributes to the
City's ability to provide services, or that the value of future economic benefits
associated with the tangible capital asset is less than its net book value, the cost of
the asset should be reduced to reflect the decline in the asset's value.
29. Conditions which may indicate that a write-down in the cost of a tangible capital
asset is required include:
(a) A change to the extent or manner in which the asset is used;
(b) Significant new technological developments which may cause the asset to
become obsolete;
(c) Physical damage to the asset;
(d) Removal of the asset from service;
(e) A decline in, or cessation of, the need for the services provided by the asset;
(f) Legal or environmental changes affecting the extent to which the asset can be
used.
30. A write-down will be recorded as an adjustment to the cost of an asset. A
corresponding adjustment will be made to the accumulated depreciation and the net
adjustment will be reported as an expense in the statement of operations. This new
cost will be amortized over the remaining useful life of the asset. Write-downs of
tangible capital assets are permanent; generally accepted accounting principles do
not allow for the reversal of write-downs.
31. The finance department will incorporate annual asset valuation reviews into the
year-end reporting schedule and will work with operating departments to review
asset listings to identify any instances where the value of future economic benefits
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is expected to be less than the net book value of the asset in question. In addition,
the information obtained from periodic condition assessment surveys will be used to
assess the carrying value of the specific assets.
Disposal of Capital Assets
32. Disposals of tangible capital assets will occur on an ongoing basis through a variety
of means including a sale or other disposition, destruction or loss, or abandonment
of the asset. A disposal removes the historical cost from the total cost of tangible
assets, along with the asset's accumulated amortization. The asset record is
removed from the active asset inventory and archived, noting the date and manner
of disposal.
33. At the date of disposal, a gain or loss is recognized based on proceeds received
less the asset's net book value (historical cost less accumulated amortization). The
definition of proceeds shall include trade-in allowances received for retired fleet or
equipment assets.
34. Similar to the policy outlined above for amortization of capital assets, one half of the
annual amortization rate will be applied to assets that are disposed of during the year,
before recording the disposal and related gain or loss.
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Appendix A: Useful Life Estimates
General Capital Assets
Asset Category
Useful Lfe
Estimate (Yrs)
Pooled
Land
Vacant
N/A
Development
N/A
Parkland
N/A
Municipality occupied
N/A
Landfill sites
N/A
Land
improvements
Sports fields
40
Recreation trails and
pathways
40
Driveways and parking lots
18
Fencing
40
Wharves and break walls
40
Boat docks and boat ramps
20
Outdoor pools and fountains
40
Golf course
40
Market square
40
Tennis courts
40
Buildings and
structures
Arenas
40
Indoor pools
40
Libraries
40
Offices
40
Garages
40
Sand and salt domes
40
Transit shelters
40
Fire stations
40
Fire training towers
40
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General Capital Assets
Asset Category
Useful Lfe
Estimate (Yrs)
Pooled
Parking garages
40
Arenas and pools - systems
40
Non-profit housing
40
Fleet
Pickups, vans
12
Heavy trucks
12
Fire trucks
20
Trailers
12
Buses
12
Boats
20
Police cars
8
Yes
Equipment
and Machinery
Tractors, graders, loaders,
etc.
20
Zambonis
10
Lawn mowers
20
Sidewalk plows
15
Street sweepers
10
Fire equipment
20
Bunker gear
20
Fuel tanks
20
Yes
Scales
40
Police weapons
10
Yes
Special equipment within
buildings
20
Furniture and
Fixtures
Interior furnishings - office
20
Yes
Furniture - long-term care
20
Yes
Library shelves
40
Yes
Outdoor play structures
25
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General Capital Assets
Asset Category
Useful Lfe
Estimate (Yrs)
Pooled
Park lighting
40
Yes
Library books
7
Yes
Computers
and Systems
Hardware
5
Yes
Software
5
Phone system
10
Emergency radios
5
Yes
Emergency pagers
5
Yes
Parking meters
20
Yes
Pay and display machines
20
Yes
Infrastructure Assets
Asset Category
Useful Lfe
Estimate (Yrs)
Pooled
Land
Airport lands
Not applicable
WTP and STP land
Not applicable
Storm water pond land
Not applicable
Land
Improvements
Storm water ponds
75
Roads and
Related
Urban road surface
18
Urban road bed
50
Semi-urban surface
18
Semi-urban bed
50
Rural road surface
18
Rural road bed
50
Sidewalks and walkways
50
Road signs
30
Yes
Streetlights
35
Yes
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Infrastructure Assets
Asset Category
Useful Lfe
Estimate (Yrs)
Pooled
Traffic signals
40
Storm sewer
50
Bridges
Bridge structures
60
Box and arch culverts
60
Airport
Runway - surface
20
Runway - base
40
Lights
20
Buildings
40
Water Utility
Water Facilities:
Building Structure
50
Building Fixtures
15
Mechanical Equipment
25
Electrical Equipment
10
Tankage
75
Water Pipes:
CI
75
Yes
DI
50
Yes
Concrete
60
Yes
PVC
80
Yes
Asbestos Cement
50
Yes
HDPE
70
Yes
Average
64
Yes
Water Other:
Water meters
15
Yes
Water hydrants
60
Yes
Water valves
50
Yes
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Infrastructure Assets
Asset Category
Useful Lfe
Estimate (Yrs)
Pooled
Sewer Utility
Sewer Facilities:
Building Structure
50
Building Fixtures
15
Mechanical Equipment
25
Electrical Equipment
10
Tankage
75
Sewer pipes:
CI
75
Yes
DI
50
Yes
Concrete
60
Yes
PVC
80
Yes
Asbestos Cement
50
Yes
HDPE
70
Yes
Average
64
Yes
Sewer - manholes
75
Yes
Gas Utility
Facilities
40
Yes
Mains and services
50
Yes
Gas meters
15
Yes
Gas regulator stations and
equipment
20
Yes
Gas operating systems
(Scada)
5
Yes
Water heaters
10
Yes
Office equipment
20
Yes
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Appendix B: Definitions
Amortization - is the accounting process of allocating the costs less the residual
value of a tangible capital asset to operating periods as an expense over the useful
life in a rational and systematic manner appropriate to its nature and use.
Amortization expense is an important part of the cost associated with providing local
government service, regardless of how the acquisition of TCA is funded.
Depreciation accounting is another commonly used term used to describe the
amortization of TCA.
Betterment - is a material cost incurred to enhance the service potential of an
asset and will:
-
increase the previously assessed physical output or service capacity
-
significantly lower associated operating costs
-
extend the life of the property or
-
improve the quality of output
Capital Budget - is an estimate of expenditures for a capital project.
Capital financing - is an allocation from the current budget to finance capital
programs that consists of debt charge payments and capital levy contributions.
Capital Program - is a combination of capital projects to be executed within a
defined timeframe to meet the requirements of a particular department.
Capital project - is an activity during which expenditures are incurred that result in
the creation of a capital asset.
Capital reserve - is an allocation of funds established as a result of legislation,
council bylaw or contractual obligations for the funding of potential future capital
projects.
Carrying Costs - are costs directly attributable to an asset's acquisition,
construction or development activity where, due to the nature of the asset, it takes a
long period of time to get it ready for its intended use. Typically carrying costs
would include:
-
technical and administrative work prior to commencement of and during
construction;
-
overhead charges directly attributable to construction or development.
Component - is a part of an asset with a cost that is significant in relation to the
total cost of that asset. Component accounting recognizes that each part might
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have a different useful life and requires separate accounting for each component
that has different useful life that the whole asset does.
Contributed Assets - are capital assets such as developer constructed services in
new subdivisions (i.e. water, sewer, roads infrastructure) acquired without cash
outlay and will be valued at fair market value when the asset is placed into
productive use/service (i.e. upon initial acceptance).
Costs - is the amount of consideration given up to acquire, construct, develop or
better a capital asset and includes all costs, including non-refundable taxes, directly
attributable to its acquisition, construction, development or betterment, including
installing the asset at the location and in the condition necessary for its intended
use. The cost of a contributed asset is considered to be equal to its fair market at
the date of contribution.
Depreciation Accounting - is the accounting procedure in which the costs or other
recorded value of a fixed asset less any estimated value on disposal is distributed
over its useful life in a systematic and rational manner. It is a process of allocations,
not valuation.
Disposal - refers to the removal of a capital asset from service as a result of a sale,
destruction, loss or abandonment.
Fair Market Value - is defined as the estimated amount for which a property would
be exchanged on the sale of valuation between a willing buyer and willing seller in
an arm's length transaction wherein the parties had each acted knowledgeably.
Functional Asset Category - is the service area in which the asset is used (i.e.
health, transportation).
Gains - can arise from transactions and events including the disposition of assets
purchased for use and not resale.
Historical cost - of an asset is the amount of consideration given up to acquire,
construct, develop or better an asset and includes all costs directly attributable to
acquisition, construction, development or betterment of the asset including installing
the asset at the location and in the condition necessary for its intended use.
Impairment - occurs when conditions indicate that a tangible capital asset no
longer contributes to the ability to provide goods and services, or that the value of
future economic benefits associated with the tangible capital asset is less than its
net book value.
Infrastructure - is composed of linear assets and their associated specific
components generally constructed or arranged in a continuous and connected
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network and may include transportation components like roads, bridges, tunnels,
storm sewers, traffic signals and signage.
Land - is the surface that is used to support structures and purchased or acquired
for value, for building sites, infrastructure (roadways, bridges, water or sewer mains,
etc.) and other program use but not land held for resale. Land normally has an
unlimited life and is not amortized.
Linear Assets - are assets generally constructed or arranged in a continuous and
connected network. They are usually defined in terms of details such as length, unit
of measure and geographic reference (e.g., start and end points).
Leased Capital Assets - are non-financial assets leased by the municipality for
use in the delivery of goods and services. Substantially all of the benefits and risks
of ownership are transferred to the municipality without requiring the transfer of
legal ownership.
Losses - can arise from transactions and events affecting local government. Such
transactions and events include the disposition of assets purchased for use and not
for resale.
Net Book Value - of a tangible capital asset is its cost, less accumulated
amortization and the amount of any write-downs.
Non-financial Assets - include TCA and other assets such as prepaid expenses
and inventories of supplies. Non-financial assets are acquired, constructed or
developed assets that are normally employed to deliver local government services,
may be consumed in the normal course of operations and are not for sale in the
normal course of operations.
Pooled Assets - are homogenous in terms of their physical characteristics, use
and expected useful life. Pooled assets are amortized using a composite
amortization rate based on the average useful life of the different assets in a group.
Pooling of assets - refers to assets of value below the materiality threshold when
considered on an individual basis but collectively make up a significant group of
assets that exceeds the threshold level (e.g. computers on network, library
collection)
Repairs and Maintenance - are reoccurring expenditures, periodically or regularly
required as part of the anticipated schedule of works required to ensure that the
asset achieves its useful life. It is an expenditure that keeps an asset in a condition
that helps maintain or ensure realization of the future economic benefits that are
expected from the asset over its initially assessed useful life.
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Residual Value - is the estimated net realizable value of a capital asset at the end
of its estimated useful life. A related term, salvage value, refers to the realizable
value at the end of an asset's life. If the municipality expects to use a capital asset
for its full life, residual and salvage value are the same.
Straight-line amortization method - a method of calculating the amortization of
an asset which assumes that the asset will decline by an equal amount of value
each year. The annual amortization is calculated by subtracting the residual value
of the asset from the purchase price and then dividing this number by the estimated
useful life of the asset.
Tangible Capital Assets (TCA) - are non-financial assets having physical
substance that are acquired, constructed or developed and
-
are held for use in the production or supply of goods and services;
-
have useful lives extending beyond the fiscal year;
-
are intended to be used on a continuing basis; and
-
are not intended for sale in the ordinary course of operations.
Threshold - is generally the minimum cost that an individual asset must have
before it is to be treated as a tangible capital asset. The threshold amount is to be
used as a guide in addition to the Treasurer's judgment.
Useful Life - is the estimate of the period over which it is expected to be used as a
tangible capital asset. The life of the tangible asset may extend beyond its useful
life.
Work in Progress - is the accumulation of capital costs for partially constructed or
developed projects.
Works of Art and Historical Treasures -property that has cultural, aesthetic, or
historical value that is worth preserving perpetually. These assets are not
capitalized as their service potential and expected future benefits are difficult to
quantify.
Write-down - is a reduction in the cost of a capital asset as a result of a decrease
in the quality or quantity of its service potential. A write-down should be recorded
and expensed in the period the decrease can be measured and is expected to be
permanent.