Laserfiche WebLink
No� 1 —S�JMMAR�OF S�GN�CANT ACCO�JNTIl�TG POL�C�S (CONTIl�T�JED� <br /> .T. Cap�tal Assets <br /> All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not <br /> available. Contributed capital assets are valued at their estimated fair value on the date contributed. The <br /> City's policy is to capitalize all assets with costs exceeding certain minimum thresholds, $5,000 for <br /> machinery and equipment, $100,000 for buildings, improvements, and infrastructure, and with useful <br /> lives exceeding two years. <br /> With the implementation of GASB Statement No. 34, the City has recorded all its public domain <br /> (infrastructure) capital assets placed in service after June 30, 1980, which include roads, bridges, curbs <br /> and gutters, streets and sidewalks, drainage systems, and lighting systems using the basic approach. <br /> The purpose of depreciation is to spread the cost of capital assets equitably among all users over the life <br /> of these assets. The amount charged to depreciation expense each year represents that year's pro rata <br /> share of the cost of capital assets. GASB Statement No. 34 requires that all capital assets with limited <br /> useful lives be depreciated over their estimated useful lives. Depreciation is provided using the straight <br /> line method which means the cost of the asset is divided by its expected useful life in years and the result <br /> is charged to expense each year until the asset is fully depreciated. The City has assigned the useful lives <br /> listed as follows to capital assets. <br /> Buildings 20-50 Years <br /> Improvements 3 3-60 Years <br /> Equipment 2-15 Years <br /> Streets 20 Years <br /> Parks 25 Years <br /> Bridges 30 Years <br /> Traffic Signals 20 Years <br /> Storm Drains 40 Years <br /> �. U,se o�'�,st��ates <br /> The preparation of the basic financial statements in conformity with generally accepted accounting <br /> principles requires management to make estimates and assumptions. These estimates and assumptions <br /> affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. <br /> In addition, estimates affect the reported amount of expenses. Actual results could differ from these <br /> estimates and assumptions. <br /> NOTE 2—CAS�AND INVESTMENTS <br /> �. Ca,s�a.�d�e�vos�ts <br /> The carrying amount of the City's cash and deposits was $1,187,522 at June 30, 2007. Bank balances <br /> before reconciling items were $3,746,169 at June 30, 2007. Of the total bank balances, $323,901 was <br /> insured or held by the City or its agent in the City's name and$3,422,268 was collateralized. <br /> All cash deposits in banks are fully insured or collateralized. California state law requires that public <br /> fund deposits be collateralized by either government securities with a value equal to 110% of the deposits <br /> or first trust deed mortgage notes having a value equal to 150%. Per state law each institution must use a <br /> third party (which may be the institution's trust department) to hold the pledged collateral in a pool to <br /> secure all the institution's public fund deposits. The code states that collateral pledged in this manner <br /> shall have the effect of perfecting a security interest in such collateral superior to those of a general <br /> creditor. Thus, collateral for cash is considered to be held in the City's name. Banks and savings and <br /> 35 <br />