HomeMy WebLinkAbout07 APPROVE THRESHOLD LEVELS FOR CAPITAL ASSETSAgenda Item
AGENDA REPORT Reviewed:
City Manager
Finance Director
MEETING DATE: DECEMBER 18, 2012
TO: JEFFREY C. PARKER, CITY MANAGER
FROM: PAMELA ARENDS -KING, FINANCE DIRECTOR
SUBJECT: APPROVE THRESHOLD LEVELS FOR CAPITAL ASSETS
SUMMARY:
Governmental Accounting Standards Board (GASB) pronouncement 34 requires the
City to capitalize assets and depreciate those assets for financial reporting purposes.
The City must set the dollar threshold to determine what purchases /infrastructure
projects will be considered capital assets.
RECOMMENDATION:
It is recommended the City Council approve the dollar threshold for capital purchases
other than infrastructure to increase from $5,000 to $10,000 and for infrastructure
assets from $100,000 to $150,000.
FISCAL IMPACT:
There is no fiscal impact with the approval of the dollar threshold for capital assets.
BACKGROUND:
GASB 34 was implemented by the City in 2003 at that time the dollar threshold for
capital purchases other than infrastructure was $5,000 and infrastructure assets was
$100,000. Based on the increase in costs over the past ten years many items were
being classified as capital assets when the items did not have a material impact on the
City's financial report, therefore, staff brought the request to increase the dollar
threshold to the Audit Commission. The Audit Commission agreed with the increase in
the dollar threshold.
V �2G
Pamela Arends -King
Finance Director