The purpose of this policy is to provide for the development and maintenance of an inventory of the fixed assets of the school district and the establishment and maintenance of a fixed asset accounting system.
II. General Statement of Policy
The policy of the school district is that a fixed asset accounting system and an inventory of fixed assets be developed and maintained. This policy defines dollar thresholds and descriptions for categories of capital assets for all departments of the district.
III. Development of Inventory and Accounting System
The Director or such other school official as designated by the Director or the school board shall be responsible for the development and maintenance of an inventory of the fixed assets of the school district, and for the establishment and maintenance of a formal fixed asset accounting system. The accounting system shall be operated in compliance with the applicable provisions of the Uniform Financial Accounting and Reporting Standards for Minnesota School Districts (UFARS). In addition, the inventory shall specify the location of all continued abstracts showing the conveyance of the property to the school district; certificates of title showing title to the property in the school district; title insurance policies; surveys; and other property records relating to the real property of the School.
The administration shall annually update the property records of the school district and provide an inventory of the fixed assets of the school district to the school board.
Capital assets include land, land improvements, buildings, building improvements, construction in progress, machinery and equipment, vehicles, easements, works of art and historical treasurers acquired by the District for use in providing services to the public. A capital asset is to be reported and depreciated in government-wide financial statements. In the government-wide financial statements, assets that are not capitalized are expended in the year of acquisition.
Establishing and Setting the Threshold Levels for Recording Capital Assets. The following elements of useful life and asset costs are established for capitalization of assets:
- A. Estimated Useful Life – The first criterion is useful life. An asset must have an estimated useful life greater than one (1) year to be considered for capitalization and depreciation. Assets that are consumed, used-up, habitually lost or worn-out in one year or less will not be capitalized.
- B. Asset Cost – The second criterion for determine depreciable capital assets is cost. The capitalization threshold shall be established as follows for per individual asset item:
- Land & Construction in Progress – Capitalize Only
- Land & Improvements – $1,000
- Building & Improvements – $1,000
- Machinery/equipment/vehicles – $1,000
VI. Depreciation and Useful Life
School administration will assign an estimated useful life to all assets for the purposes of recording depreciation. 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 actual month convention and depreciated down to the assets salvage value.