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2024 ORGANIZATIONAL WETING\Fixed Asset Policy
RESOLUTION ADOPTING TOWN FIXED ASSET POLICY
RESOLUTION NO.: 12024
INTRODUCED BY:
WHO MOVED ITS ADOPTION
SECONDED BY:
WHEREAS, the Queensbury Town Board wishes to adopt the Town of Queensbury Fixed
Asset Policy for 2024,
NOW, THEREFORE, BE IT
RESOLVED, that the Queensbury Town Board hereby adopts the Town of Queensbury
Purchasing Policy for 2024 substantially in the form presented at this meeting, and
BE IT FURTHER,
RESOLVED, that the Town Board further authorizes and directs the Town Budget Officer to
distribute copies of such Policy to all Town Department Managers and the Town Supervisor and/or
Town Budget Officer to take any other actions necessary to effectuate the terms of this Resolution.
Duly adopted this V day of January, 2024 by the following vote:
AYES Mr. Metivier, Mr. Freer, Mr. Dixon, Mr. McNulty, Mr. Strough
NOES None
ABSENT: None
MISCELLANEQUS1Fixed Asset Policy — 2024
FIXED ASSET POLICY
FIXED ASSETS
In general, a Fixed Asset may be described as a physical, tangible "thing". To be in compliance
with New York State guidelines, we are going-to use the Fixed Asset software available from
MUNIS.
Items that must he flagged as a fixed asset include
Any single item with a value of $2,500 and alcove. For example:
a. Land
b. Infrastructure such as roads, water mains, pump stations
c. Machinery
d. Building
e. Vehicles
f. Equipment (may include "bank" purchases, such as 20 tool boxes @ $ 125 each).
g. Improvements such as a new plow added to a highway truck, a sprinkler system
added to a park or fencing and signs
Items with a value of less than $2,500 may be inventoried in the MUNIS Fixed Assets for a
department's convenience. They will be assigned a tag number and will be included in the list
sent out at the beginning of the year for annual inventory confirmation. Department Managers
wishing to include items under $2,500 for inventory control purposes, please see Barbara
Tierney to address and determine method on a case by case basis.
Computers, electronic accessories and subscription based IT arrangements (SBITAs) will be
inventoried by the Accounting Staff. You are not responsible for flagging these items.
For the most part the items you will flag as a Fixed Asset will be considered equipment.
hams that are nol +considered fixed assets;
a. Maintenance
b. Repairs
C. Contracts (except SBITAs)
Your Department Manager will advise you which items must be}lagged as a Raced Asset.
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HOW TO FLAG A REQUISITION OR A VOUCHER AS A FIXED ASSET
Items may be flagged as a Fixed Asset on both the Requisition and when you enter a
payment Voucher.
1) How to flag a Requisition:
The 3rd page of the requisition process contains an entry for Fixed Asset; enter a
"Y" foryes.
2) How to flag a Voucher for a Fixed Asset:
a. In the Lines section (where you list your Org and Object codes and the
amount of the purchase) under column A, indicate "Y" for yes.
b. Complete an Inventory Adjustment Form and submit with the Voucher
and invoice. These forms are available on the Town's Intranet under
"Forms."
The Accounting Office will assign a Tag number and Location Code and forward an Asset
Tag for placement on the item.
HOW TO REMOVE AN ITEM FROM THE FIXED ASSET INVENTORY
When an item is replaced, junked, traded or sold on a bid, you must advise the Accounting
Department by completing another Inventory Adjustment Form. Complete both sections
for a replacement or trade, and only the lower half for junked or sold items.
This form may also be used to indicate a LOCATION CHANGE. Keeping that information
current will make the annual inventory much easier for the Department.
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TABLE OF CONTENTS
1 . Capital Asset Definitions and Guidelines
Capital Asset Classifications ....... ....... .............................. .... ...... 6
Capitalization Thresholds and Useful Lives .".. .. .. ..V...... .... .. ....... 6
Capital Asset Acquisition Costs... ....... .... .............................. ..... 6
Gifts of Capital Assets........ .. ..... ..... ....... .. ........... .. .. ............. .. ......7
Leased Equipment ..... ,**,,*"", ................. 7
Depreciating Capital Assets ..... ................ ..... .. ................. .......... 7
Residual Value.,. .. ..................... . ....... r. r....r.................
Sale of Capital Assets ..""""""""............... .................. 8
Computation of Gain and Loss from Sales of Assets ............ .. .. . 8
11 . Capital Asset Categories
Land .................................................. ........................ ....... ........... 9
Land Definition
Depreciation Methodology
Capitalization Threshold
Examples of Expenditures to be Capitalized as Land
Buildings . . . . . . . . . . .. . .. .................... ...... ................... .............. ........ ... 9
Building Definition
Depreciation Methodology
Capitalization Threshold
Examples of Expenditures to be Capitalized as Buildings
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Improvements otherthat Buildings ........ .. ...................... .......... 1 1
Improvement other than Buildings Definition
Depreciation Methodology
Capitalization Threshold
Machinery and Equipment .......... ........................ ......................... 11
Machinery and Equipment Definition
Categories of Machinery and Equipment
Capitalization Threshold
Depreciation Methodology
Examples of Expenditures to be Capitalized as Machinery and Equipment
Infrastructure .. .................. ....... ........... .................... ..................... ........ 12
Infrastructure Definition
Infrastructure Improvements
Jointly Funded Infrastructure.
Maintenance Costs
Additions and Improvements
Depreciation Methodology
Capitalization Threshold
Infrastructure Classifications
Examples of Expenditures to be Capitalized as Infrastructure
Subscription Based IT Arrangements (SBITAs) . . . . . . . . . . . . . . . . . . . . . . . . . 13
Definition
Amortization Methodology
Capitalization Threshold
4
Construction in Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 14
Construction in Progress Definition
Depreciation Methodology
Capitalization Threshold
APPENDIXA. .. . . . .. . . . . . . . .. . . . .. . . . . . . . . . .. .. .. . . . .. . . . . . . . . . . . . . .. . . . . .. . . . . .A- 1 -A.- 1 S
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I. Capital Asset Definitions and Guidelines
Capital Asset Classifications
Capital assets are assets purchased or constructed by the Town of Queensbury (the
"Town") that have a useable life of 2 or more years and that have a value equal to or greater
than the established capitalization threshold. The following categories are used for the
Town of Queensbury.
• Land
Buildings
• Improvements Other Than Buildings
.Machinery And Equipment
0 Infrastructure _
0 Roads
a Traffic Control Systems
+ Darns and Drainage Systems
+ Sewer Systems
• Water Systems
• Subscription based IT Arrangements (SBITAs)
Construction in Progress
Capitalization Threshold and Useful Lives
Useful Life is determined using tables provided in the Capital Asset module of the Local
Government .Management Guide by the NYS Office of the State Comptroller as a
guideline. Please see Appendix A for a complete list. If an item is not addressed in the
Local Goverment Management Guide, the Fixed Asset Manager will assign a useful life
span.
Aggregate Purchases: Although, in general, the threshold of $ 10,000 applies to each unit
purchased, consideration must also be given to aggregate amount for large quantities of
like units because of "materiality" . Therefore, an aggregate amount of like units that total
$ 10,000 or more should be given special consideration with respect to capitalization. If
this occurs within your operation, please call the Accounting Department to discuss the
issue. Example. A Department purchases 1 ,000 units at $250 per unit, for a total aggregate
amount of $250,000.
Capital Asset Acquisition Cost
Capital assets should be recorded at their historical costs.
The cost of a capital asset should include any ancillary costs that are necessary to place the
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asset in its intended condition for use. These include the vendor's invoice (plus the value
of any trade-in, if reflected on the invoice), initial installation cost (excluding in-house
labor), modifications, attachments, accessories or apparatus necessary to make the asset
usable and render it into service.
Historical costs also include charges such as freight and transportation charges, site
preparation costs and professional fees. The costs of capital assets for government
activities do not include capitalized interest.
In-house labor is being added to Roads as part of the cost of infrastructure
Gifts of Capital Assets
Capital assets acquired by the Town through a gift should be reported at fair market
value at the time of acquisition plus ancillary charges, if any. Gifts are defined as
voluntary contributions of resources to a governmental entity by a non-governmental
entity.
In most instances, the determination of fair market value can be made by town
personnel having knowledge of the donated asset, without the need to engage a
professional appraiser.
Nate: Fair value is the amount at which an asset could be exchanged in a current
transaction between willing parties.
Leased Equipment
Equipment should be capitalized if the lease agreement meets any one of the following
criteria:
• The lease transfers ownership of the property to the lessee by the
end of the lease term.
• The lease contains a bargain purchase option.
* The lease term is equal to 75 percent or more of the estimated
economic life of the leased property
* The present value of the minimum lease payments at the
inception of the lease, excluding executory costs, equals at least
90 percent of the fair value of the leasedproperty.
Leases that do not meet any of the above requirements should be recorded as an
operating lease and reported in the notes of the financial statements.
J3gpreciating Capita[ Assets
Capital assets, excluding land, should be depreciated over their estimated useful lives
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in accordance with this policy unless they are inexhaustible. The useful life of Ian;
considered inexhaustible.
The straight-line depreciation method (historical cost divided by useful life) is the metl
that will be used.
Depreciation will be calculated on an annual basis. The first year of depreciation will
included in the first year following the completion or acquisition of the asset. Also, a
year of depreciation expense will be included in the year of disposition. Accurnula
depreciation will be summarized and posted to the accounting general ledger for the ent:
wide financial statements.
Residual Value
Residual value is the estimated fair value of a capital asset or infrastructure remaining
the end of its useful life. In order to calculate depreciation for an asset, the estima
residual value must be established before depreciation pan be calculated. The use
historical sales information becomes a valuable method for determining the estima
residual value. Proceeds from sale of assets must be netted against residual value
computing net gain or loss from sale.
Sale of Capital Assets
The Town Board occasionally may determine that an asset is no longer needed. In this c
the Town Board may authorize the sale of such item(s). The sale price of the item sho
generally approximate Fair Market Value. If a Capital Asset is to be sold to snot
government, the price may be negotiated.
Computation of Gain and Loss from Sale of Assets
To compute a gain or loss, proceeds received must be subtracted from the asset's net ba
value.
Example:
Asset's Historical Cost $ 10,000
Less Accumulated Depreciation $ 71000
Net Book Value $ 31000
Substract Proceeds Received $ 22000
Loss from Sale of Asset $ 1 ,000
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II. Capital Asset Categories
Land
Definitign
Land is the surface or crust of the earth, which can be used to support structures, and may
be used to grow crops, grass, shrubs, and trees. Land is characterized as having an
unlimited life (inexhaustible)
Depreciation ethodolo
Land is an inexhaustible asset and is not depreciated.
Capi�Iization Threshold
Since land is a unique capital asset that is inexhaustible, and can be easily identified with
tax and assessment records, there will be no Capitalization threshold for land. All parcels
of land owned by the town will be included as capital assets regardless of historical cost
or donated market value.
Fxamples of Expenditures to be Capitalized as Land
* Purchase price or fair market value at time of acquisition
• Commissions
* Professional fees (title searches, architect, legal, engineering,
appraisal, surveying, environmental assessments, etc.)
• Accrued and/or unpaid taxes, if any, at the date of acquisition.
Other costs incurred in acquiring the land, such as site
improvements that are needed to acquire the land, but are not
considered Improvements Other Than Buildings. For example, if the
Town acquires property for land purposes only, but the property
includes an old building not needed for Town purposes and other
items such as railroad, telephone and power lines, the costs of
demolition of the old building and removal would normally be
included in the value of the land acquired
• Right of Way
Rulldint!s
I7+ef r�,jtion
A building is a structure that is permanently attached to the land, has a roof, is partially
or completely enclosed by walls, and is not intended to be transportable or moveable.
Uepreciation Methodology
The straight-line depreciation method (historical cost less residual value, divided by
useful life) will be used for buildings. Useful life for buildings is generally considered
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to be 40 years.
Capitalization Threshold
The capitalization threshold for buildings is $ 10,000.
Examl2les of exlenditures to be capitalized as buildings
Purchased Buildings
Original purchase price
* Expenses for remodeling, reconditioning or altering a
purchased building to make it ready to use for the purpose for
which it was acquired
+ Environmental compliance (i.e., asbestos abatement)
• ProfessionaI fees (legal, architect, inspections, title searches,
etc.)
* Other costs required to place the asset into operation
* Professional fees (legal, architect, inspections, title searches,
etc.)
+ Other costs required to place the asset into operation
Constructed Buildings
* Completed project cost
* Interest accrued during construction
+ Cost of excavation or grading or filling of land for a specific
building and other site improvements needed to construct the
building and initially prepare the building for its intended use.
• Expenses incurred for the preparation of plans, specifications,
blueprints, etc.
+ Professional fees (architect, engineer, management fees for design
and supervision, legal)
Costs of temporary buildings used during construction
+ Unanticipated costs such as rock blasting, piling, or relocation of the
channel of an underground stream
+ Permanently attached fixtures or machinery that cannot be removed
without impairing the use of the building
* Additions to buildings (expansions, extensions, or enlargements)
+ Building costs should include the initial costs of fixed equipment
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ncluded in the building construction, such as heating ventilating
and air conditioning systems.
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Iprovements Other Than Buildings
Definition
This asset category consists of exhaustible improvements made to newly acquired or already
owned properties that are not part of the buildings located on the sites. These assets would include
parking lots, driveways, recreation/athletic fields, skating rinks, tennis courts, basketball courts,
improved areas in town parks, outdoor lighting for parking lots and recreation/athletic fields, other
non-infrastructure utilities, fencing, retaining walls, and other similar assets.
Depreciation Methodology
Improvements other than buildings will be depreciated on a straight-line basis.
Capitalization Threshold
The Capitalization threshold for is $ 10,000.
Machinery and EguiMen
Definition
Fixed or movable tangible assets to be used for operations, the benefits of which extend beyond
one year from date acquired and rendered into service. Improvements or additions to existing
personal property that constitute a capital outlay or increase the value or life of the asset should be
capitalized as a betterment and recorded as an addition of value to the existing asset.
Notes Costs of extended warranties and/or maintenance agreements, which can be separately
identified front the of the equipment, should not be capitalized.
Cateeories of Machinery and Equipment
* Computers
0 Office Electronics
• Communications
0 Network Accessories
+ Office Equipment
• Passenger Cars
■ Utility Vehicles
0 Heavy Duty Equipment & Attachments
Equipment, Other
CWitalization Threshold
The capitalization threshold for machinery and equipment is $ 10,000.
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Del2reciation Methodology
The straight-line depreciation method (historical cost less residual value divided by useful life)
will be used for machinery and equipment.
Examples of Expenditures to be CatAtalized as Machinery and Equipment
• Original contract or invoice price
0 Freight charges
0 Handling and storage charges
In-transit insurance charges
• Sales, use, and other taxes imposed on the acquisition
• Charges for testing and preparation for use
+ Costs of reconditioning used items when purchased
• Computer software and hardware
• Parts and labor associated with the construction of equipment
• Road Graders and other heavy construction equipment
Dump trucks and passenger cars
• Lawn maintenance equipment, compressors, and tool kits
Infrag5tructure
Definition
Assets that are long-lived capital assets that normally is stationary in nature and can be preserved
for a significantly greater number of years than most capital assets. Infrastructure assets are often
linear and continuous in nature.
Infrastructure Improvements
Infrastructure improvements that materially extend the useful life may be included in the capital
asset inventory if the improvement is at the capitalization threshold or increases the life or value
of the asset. Final determination will be made by the Fixed Asset Manager.
Jointly Funded Infrastructure
Infrastructure paid for jointly by multiple governmental entities should be capitalized by the entity
responsible for future maintenance.
Maintenance Costs
Maintenance costs are recurring costs that allow an asset to continue to be used during its originally
established useful life. Maintenance costs are expensed in the period incurred.
Additigns and Improvements
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Additions and improvements are those capital outlays that generally increase the capacity or
efficiency of the c 1 sset. A change in capacity increases the level of service provided by an asset.
For example, additional lanes can be added to a highway or the weight capacity of a bridge could
be increased. A change in efficiency maintains the same service level, but at a reduced cost. The
cost of additions and improvements should be capitalized..
Depreciation Methodology
The straight-line depreciation method (historical cost less residual value, divided by useful life)
will be used for infrastructure assets.
Capitalization Threshold
The capitalization threshold for infrastructure is $ 103000.
Infrastructure Classifications
* Roads
+ Traffic Control Systems
* Dams and Drainage Systems
* Sewer system
+ Water system
+ Bridges (including culverts)
Examples of Expenditures to be Capitalized as InfirAgructure
* Highways
+ Roads, streets, curbs, gutters, sidewalks, fire hydrants
* Bridges, culverts, trestles
* Dams, drainage facilities
+ Electric, water and gas (main lines and distribution lines, tunnels)
+ Fiber optic and telephone distribution systems (between buildings)
• Light system (traffic, outdoor, street, etc.)
+ Signage
* Sewer systems
+ Water systems (including reservoirs)
Subscription Based 11 Arranvements /SBITAs)
Definition
Subscription based IT agreements (SBITAs) convey control of the right of the Town to use
another party's technology software, alone or in combination with tangible capital assets,
specified in a contract for a period of time in an exchange or exchangc-like transaction.
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Amortization Methodology
SBITAs are capitalized utilizing the subscription term where the Town has a
noncancellable right to use the underlying IT asset plus any options to extend, if reasonably
certain and are measured using the present value of the subscription payments expected to
be made during the remaining subscription term, discounted to the interest rate charged by
the vendor or the incremental borrowing rate of the Town. The subscription asset is
amortized in a systematic manner of the shorter of the subscription term or the useful life
of the underlying IT asset.
Capitalization Threshold
SBITAs with contract terms greater than 12 months and total contract payments
exceeding $ 10,000 are capitalized.
Construction in PrgZj: s
DMfinition
Construction in Progress reflects the economic construction activity status of buildings and
other structures, infrastructure (highways, energy distribution systems, pipelines, etc.),
additions, alterations, reconstruction, installation, and maintenance and repairs, which are
substantially incomplete.
Depreciation Methodology
Depreciation is not applicable while assets are accounted for as Construction in Progress.
Upon asset completion and placement into service, the value of such ,asset is removed from
Construction in progress. Depreciation then begins based upon depreciation life of the
appropriate asset category. See appropriate capital asset category when asset is capitalized.
Canitaliz_ation 'Threshold
Construction in progress assets should be capitalized to their appropriate capital asset
categories upon the earlier occurrence of execution of substantial completion contract
documents, occupancy, or when the asset is placed into service.
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