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HomeMy WebLinkAboutR-2025-006 Creating a Fixed Asset Policy RESOLUTION NO. R-2025-006 A RESOLUTION CREATING A FIXED ASSET POLICY BE IT RESOLVED BY THE BOARD OF ALDERMEN OF THE CITY OF RIVERSIDE, MISSOURI AS FOLLOWS: THAT the Board of Aldermen approves the Fixed Asset Policy, effective for the 2025 fiscal year, attached hereto and incorporated herein by reference; and FURTHER THAT the Mayor, the City Administrator, Finance Director, and other appropriate City officials are hereby authorized to take any and all actions as may be deemed necessary or convenient to carry out and comply with the intent of this Resolution. PASSED AND ADOPTED by the Board of Aldermen of the City of Riverside, Missouri, the 21 st day of January 2025. Mayor Kathleen L. Rose ATTEST:F' ', 1 • . :- Robin in ai ;"'City,Clerk r, c City of Riverside Fixed Asset Policy 1/21/2025 General Statement: All assets meeting the definition of a fixed asset or intangible asset shall be considered an inventorial long-term asset and shall be recorded in the agency's asset inventory system. Asset Valuation: Agencies shall record long-term assets at historic cost or, if the cost is not readily determined, at estimated historic cost. Cost shall include applicable ancillary.costs. All costs shall be documented, including methods and sources used to establish any estimated costs. 1. Purchased Assets-the recording of purchased assets shall be made on the basis of actual costs, including all ancillary costs, based on vendor invoice or other supporting documentation. 2. Self-Constructed Assets - All direct costs (including labor) associated with the construction project shall be included in establishing a self-constructed asset valuation. If an agency is unable to specifically identify all direct costs (such as labor costs) an estimate of the direct cost is acceptable, but must be supported by a reasonable methodology. 3. Donated Assets- Fixed assets acquired by gift, donation, or payment of a nominal sum not reflective of the asset's market value shall be assigned cost equal to the fair market value at the time of acquisition. Asset Classification: Long-term assets should be categorized into the following categories: Equipment Buildings Land Improvements Land Infrastructure Construction in Progress Capitalization: For Inventory Purposes All long-term assets with a cost equal to or greater than $100 and a useful life of greater than one year. At the time of purchase a pre-numbered/bar coded sticker will be applied to the asset. For Financial Reporting and Depreciation Purposes All long-term assets with a cost equal to or greater than $10,000 and a useful life of greater than one year. If a group of similar assets are purchased together that collectively have a cost of greater than $10,000, for purposes of this policy the aggregate cost will be considered even if the cost is less than $10,000 on an individual basis. Depreciation of Long-Term Assets: All long-term assets (except for land, and construction in progress) identified in the capitalization policy, must be depreciated on a straight line basis over the useful life of the asset upon being placed in service. Useful Life of Assets Buildings and improvements 50 years Building Improvements 5-25 years Vehicles 3-5 years Office & Operating Equipment 5-7 years Major Equipment—Fire Trucks, Heavy Machinery 10-20 years Land Improvements 10-25 years Streets and Bridges 30-40 years Construction in Progress Capitalization: (CIP) A CIP asset reflects the cost of construction work undertaken, but not yet completed. For construction in progress assets, no depreciation is recorded until the asset is placed in service. When construction is completed, the asset should be reclassified as building, infrastructure, land improvement, or equipment and should be capitalized and depreciated. Annual Physical Inventory: The City will conduct a complete physical inventory of their long-term assets at the end of each fiscal year. Such inventory shall be reconciled annually with the records maintained by the Finance Division.