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Resolution No. 5176
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2016 No. 5146-5179
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Resolution No. 5176
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12/29/2016 10:26:56 AM
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12/29/2016 10:26:13 AM
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City Recorder
CMO_Document_Type
Resolutions
Document_Date
12/12/2016
Document_Number
5176
CMO_Effective_Date
12/12/2016
Author
CRO
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CITY OF EUGENE, OREGON <br />Notes to Basic Financial Statements <br />(1) Summary of Significant Accounting Policies, continued <br />(J) Capital Assets, continued <br />Infrastructure capital assets are those that are stationary in nature and can be preserved for a significantly greater <br />number of years than most other capital assets. The City has a transportation infrastructure system reported in <br />governmental activities consisting of roads, bridges, sidewalks, and traffic and lighting systems. Infrastructure <br />reported in business-type activities includes a regional airfield, parking lots, and stormwater and wastewater collection <br />systems. Except for governmental activities infrastructure placed in service prior to July 1, 1980, all capital assets <br />have been capitalized in the government-wide and proprietary fund financial statements. In accordance with the <br />current financial resources measurement focus, capital assets are not capitalized in the governmental fund financial <br />statements. All purchased capital assets are valued at cost where historical records are available and at estimated <br />historical cost where no historical records exist. Historical cost is measured by the cash or cash equivalent price of <br />obtaining an asset, including ancillary charges necessary to place the asset into its intended location and condition for <br />use. Donated capital assets are reported at their estimated fair value at the time of acquisition plus ancillary charges, <br />if any. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are <br />capitalized. Amounts expended for maintenance and repairs are charged to expenditures/expenses in the <br />appropriate funds as incurred and are not capitalized. Capital improvements financed by special assessments which <br />provide assets to the City’s Stormwater Utility Fund and Wastewater Utility Fund are capitalized in the proprietary fund <br />Statement of Fund Net Position. <br />Capital assets are depreciated unless they are inexhaustible in nature or have an indefinite useful life (e.g., land and <br />rights-of-way). Depreciation is an accounting process which allocates the cost of capital assets, in a systematic and <br />rational manner, to those periods expected to benefit from the use of capital assets. Depreciation is not intended to <br />represent an estimate in the decline of fair market value, nor are capital assets, net of accumulated depreciation, <br />intended to represent an estimate of the current condition of the assets, or the maintenance requirements needed to <br />maintain the assets at their current level of condition. <br />Depreciation is computed over the estimated useful lives of the capital assets. All estimates of useful lives are based <br />on actual experience by City departments with identical or similar capital assets. Infrastructure assets are <br />depreciated using a composite depreciation method. All other categories of assets are depreciated on the straight- <br />line basis of accounting. The estimated useful lives of the various categories of assets are as follows: <br /> Estimated <br />Category useful life <br />Buildings 40-50 years <br />Improvements other than buildings 20 years <br />Infrastructure25-40 years <br />Equipment 3-15 years <br /> <br />Upon disposal of capital assets, cost and accumulated depreciation are removed from the accounts and, if <br />appropriate, a gain or loss on the disposal is recognized. <br />Capital assets of proprietary funds are reported net of accumulated depreciation in the government-wide Statement of <br />Net Position and the proprietary funds Statement of Fund Net Position. Capital assets not specifically related to <br />activities reported in proprietary funds are reported net of accumulated depreciation in the governmental activities <br />column in the government-wide Statement of Net Position.Depreciation expense on proprietary fund capital assets is <br />reported in the government-wide Statement of Activities and the proprietary fund Statement of Revenues, Expenses, <br />and Changes in Fund Net Position. Depreciation expense on general capital assets is reported in the government- <br />wide Statement of Activities as a direct expense. <br />(K) Capitalized Interest <br />Interest is capitalized on constructed assets in proprietary funds. For the year ended June 30, 2016, no interest was <br />capitalized on proprietary fund capital assets. <br />continued <br />43 <br />
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