4:080-AP3 Capital Assets and Depreciation

Definition

Capital asset means any parcel of land, building, improvement to land other than buildings, instrument, machine, apparatus, or set of articles that:

  • under normal conditions of use, including reasonable care and maintenance, can be expected to serve its principal purpose for longer than 12 months;
  • does not lose its identity through fabrication or incorporation into a different or more complex unit or substance;
  • is nonexpendable; that is, if it is damaged or some of its parts are  worn out, it is more feasible to repair than replace;
  • retains its appearance and character through use; and
  • has cost equal to or in excess of the capitalization threshold adopted by the Board.

Capitalization threshold means a dollar figure above which the cost of an item will be depreciated.

Depreciation allowance means an estimate of the annual cost of using an item that is based on its acquisition cost divided by its assumed or estimated useful life.

Non-capitalized equipment means any item that would be a capital asset except for the fact that its cost is less than the capitalization threshold adopted by the Board.

Capitalization Threshold

The District defines capital assets as assets with initial, individual cost of more than $5,000 for furniture, equipment, buildings and improvements, and an estimated useful life in excess of two years.

Depreciation Schedule

Useful lifetimes and annual depreciation rates for various classes of capital assets and non-capitalized equipment shall be based on the following schedule:

Classification Estimated Useful Lifetime Annual Depreciation Rate
Works of art and historical treasures Permanent None
Land Permanent None
Permanent buildings 50 years 2%
Temporary buildings 20 years 5%
Improvements other than buildings (infrastructure) 20 years 5%
Equipment (three-year schedule) 3 years 33.33%
Equipment (five-year schedule) 5 years 20%
Equipment (ten-year schedule) 10 years 10%
Construction in progress Not applicable 0%
Non-capitalized equipment 10 years 10%

 

Date Reviewed: April 26, 2016