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Redevelopment Agency of the City of Redwood City Notes to Basic Financial Statements, Continued For the year ended June 30, 2008 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued E. Capital Assets, Continued Depreciation is recorded on a straight-line basis over estimated useful lives of the assets as follows: Buildings Improvements Equipment Streets Parks Bridges Traffic Signals Storm Drains 20-50 Years 33-60 Years 2-15 Years 20 Years 25 Years 30 Years 20 Years 40 Years In June 19991 the Governmental Accounting Standards Board (GASB) issued Statement No. 34 which requires the inclusion of infrastructure capital assets in local governmentsl basic financial statements. In accordance with GASB Statement No. 34, the Agency has included all infrastructures into the current Basic Financial Statements. The Agency defines infrastructure as the basic physical assets that allow the Agency to function. The assets include roadsl bridges, curbs and gutters, streets and sidewalks, drainage systems, and lighting systems. Each major infrastructure system can be divided into subsystems. These subsystelns were not delineated in the basic financial statements. The appropriate operating department maintains information regarding subsystems. For all infrastructure systems, the Agency elected to use the Basic Approach as defined by GASB Statement No. 34 for infrastructure reporting. The accumulated depreciation, defined as the total depreciation from the date of construction/acquisition, to the current date on a straight-line, unrecovered cost method was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the original cost. F. Long- Tenn Debt In the government-wide financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable goverrunental activities. Bond premiums and discounts and issuance costs, if material, are deferred and amortized over the life of the bonds using the straight line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the .fund financial statementsl governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financial sources. Premiums received on debt issuance are reported as other financing sources w bile discounts on debt issuance reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 25