This policy establishes the minimum cost value (capitalization amount) that shall be used to determine the capital assets, including infrastructure assets, that are to be recorded in the Town of Turner, Maine’s annual financial statements in order to comply with the requirements of GASB Statement Number 34.

This policy also addresses other considerations for recording and depreciating fixed assets in order to comply with the provisions of GASB Statement number 34.

CAPITAL ASSET DEFINITION

Capital Asset will be defined as tangible and intangible assets that have initial useful lives that extend beyond a single reporting period.

CAPITALIZATION METHOD

All Capital Assets will be recorded at historical cost as of the date acquired or constructed. If historical cost information is not available, assets will be recorded at estimated historical cost by calculating current replacement cost and deflating the cost using the appropriate price-level index.

CAPITALIZATION THRESHOLDS

Fixed Asset Limits:

A Land: All land and permanent rights to land (i.e. easements) shall be recorded without regard to significant value.

B Buildings: All buildings shall be recorded at acquisition cost without regard to significant value. Additions to buildings less than $ 2,500 per building shall not be recorded.

C Equipment: Equipment costing $ 5000 and more shall be recorded as Fixed Assets. Additions to equipment costing $ 2500 or more shall be recorded as Fixed Assets.

D Additional Fixed Assets: Shall be recorded and maintained when required by other terms or agreements, if different from what is stated above.

E Items not Classified as Fixed Assets: As described above may be included in an inventory listing for internal control purposes.

INFRASTRUCTURE ASSETS

In accordance with GASB Statement Number 34, the Town will record, at a minimum, "major" infrastructure assets as defined in Statement 34 that were acquired, constructed or significantly reconstructed, or that received significant improvements after June 30, 2003. Other infrastructure assets may be capitalized as deemed appropriate. The Town does not intend to use the "modified approach" to record infrastructure.

As provided for in GASB Statement Number 34, the Town has elected to NOT incorporate retroactive capitalization of infrastructure assets in it’s Fixed Asset Policy.

OTHER ASSETS

Detailed records shall be maintained for all items below the capitalization thresholds that should be safeguarded from loss. These items will be part of the annual physical inventory discussed below. These items include computer equipment that falls below the established thresholds and any other asset specified by the Town Manager.

DEPRECIATION AND USEFUL LIFE

The Treasurer will assign an estimated useful life to all assets for the purpose of recording depreciation. The attached "Suggested Useful Lives" schedule will be used to establish lives for most assets. Asset lives will be adjusted as necessary depending on the present condition and use of the asset and based on how long the asset is expected to meet current service demands. Adjustments should be properly documented. Depreciation will be recorded based on the straight-line method using the half-year convention and depreciation down to the assets salvage value.

SAFEGUARDING AND CONTROLLING FIXED ASSETS

All machinery and equipment, vehicles and furniture will be assigned an asset number and identified with a fixed asset tag. As fixed assets are purchased or disposed of, the Department Head in custody of that asset will be responsibly for preparing a fixed asset data sheet, which will then be forwarded to the Treasurer to ensure proper recording. A physical inventory will be taken annually on or about June 30 and compared to the physical inventory records. The results will be forwarded to the Treasurer where appropriate adjustments will be made to the fixed asset records.

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