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CITY OF LINO LAKES <br />CAPITAL ASSET POLICY <br />Purpose <br />It is the policy of the City of Lino Lakes to maintain appropriate procedures regarding the <br />procurement, management, and disposal of all capital assets in accordance with <br />Governmental Accounting Standards Board Statement No. 34 (GASB 34). This Capital Assets <br />Policy establishes criteria for reporting capital assets within the City's financial statements in <br />order to provide users with consistent and comparable information for the current and all future <br />fiscal periods. <br />Section I: Define Capital Assets and Capitalization Thresholds <br />Capital assets are reported in the applicable governmental or business -type activities columns <br />in the City's government -wide financial statements. <br />A capital asset is real or personal property used in operations which has an individual value <br />equal to or greater than the capitalization threshold set forth by the City, for that specific asset <br />classification, and has an estimated useful life greater than one year. For financial reporting <br />purposes only, the City will classify and establish capitalization thresholds for each asset class <br />as follows: <br />Land $10,000 <br />Buildings and building improvements $50,000 <br />Improvements other than buildings (land improvements) $25,000 <br />Machinery and equipment $10,000 <br />Infrastructure and other improvements $100,000 <br />Other assets $10,000 <br />Construction in progress *** <br />***Accumulate all costs and capitalize if over the capitalization threshold for the applicable asset class. <br />Section II: Reporting Capital Assets <br />Capital assets are reported at their historical cost. The historical cost of a capital asset should <br />include the cost of the asset itself and the following: <br />• Ancillary charges necessary to place the asset into its intended location (e.g., freight <br />charges) <br />• Ancillary charges necessary to place the asset into its intended condition for use (e.g., <br />installation and site preparation charges) <br />A cost should only be capitalized if it is (1) directly identifiable with a specific asset and (2) only <br />if it is incurred after the acquisition of the related asset has come to be considered probable <br />(i.e., "likely to occur"). For example, a study to determine the best location for a building or a <br />