Financial Policies: Section 160 - Capital Assets

It is the policy of the Board of County Commissioners (BOCC) to utilize generally accepted accounting principles to record and account for the capital assets of the County Government and its agencies, offices, and operating departments.

This policy shall apply to all assets of the County Government and shall be complied with by all employees, officials, agencies, offices, and departments of County Government.

Policy 160.2 Definitions

The term capital assets is defined as costs incurred to acquire items that will be used in operations for the benefit of multiple periods. Examples of capital assets include land, improvements to land, easements, buildings, building improvements, vehicles, machinery, equipment, works of art and historical treasures, infrastructure, and all other tangible or intangible assets that are used in operations that have initial useful lives extending beyond a single reporting period.

The term infrastructure is defined as long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems.

The term intangible assets is a nonfinancial asset that lacks physical substance and with an initial useful life that extends beyond a single reporting period. Examples of intangible assets include easements, water rights, timber rights, patents, trademarks, and purchased or internally generated computer software.

Policy 160.3 Accounting Principles for Capital Assets

The capital assets for County Government shall be recorded and accounted for according to the following principles:

Both tangible and intangible assets will be capitalized using the following criteria:
1. Land assets will always be capitalized; will be capitalized without regard to cost; and will not be depreciated.
2. Infrastructure will be capitalized if it has a life expectancy of five (5) years or greater and a designated value exceeding $100,000.
3. Easements associated with a capital project will be capitalized as part of the capital project, with the exception of roads, in which case the easement will be capitalized separately. Easements that are independent of a capital project or part of a road project will be capitalized if the designated value exceeds $100,000. Temporary easements will not be capitalized.
4. Intangible assets, other than easements, will be capitalized if the asset has a designated value exceeding $1,000,000.
5. Assets other than land, infrastructure, and those which are intangible, including leases on assets, will be capitalized if the asset or lease interest has a useful life of five (5) years or more and a designated value exceeding $10,000.
6. Assets which are acquired with grant funding or other committed revenues and which do not meet the criteria for capitalization will nonetheless be capitalized whenever the Director of Financial Management determines it to be necessary or advisable.
All capitalized assets shall be recorded and inventoried on forms established by the Director of Financial Management, and periodic physical inventories will be required. The separate agencies, departments, and offices shall maintain recorded and physical inventory of assets in its possession which have a cost of $1,000 to $10,000. Assets with a value of less than $1,000 should be inventoried as needed for the prudent care of County funds and property.
Capitalized assets, other than land, will be depreciated using the straight-line depreciation method.
Capitalized assets will not be written off from the records or accounts of the County until the asset is disposed of physically.

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Financial Policies: Section 160 - Capital Assets