Laserfiche WebLink
CITY OF SAN LEANDRO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />For The Year Ended June 30, 2016 <br /> <br /> <br />NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES (Continued) <br /> <br />G. Inventory <br /> <br />Inventory is held for consumption and is valued at average cost. Internal service fund supplies consist of <br />materials and supplies for the various City vehicles (tires, batteries, etc.) and building maintenance, which <br />are used for replacement parts for vehicle service and to maintain City buildings. Information <br />management service inventory consists of postage for department use and a monthly count is performed <br />to adjust this account to actual at the appropriate month-end. <br /> <br />H. Capital Assets <br /> <br />Capital assets are valued at historical cost or estimated historical cost if actual historical cost was not <br />available. Donated capital assets are valued at their estimated fair market value on the date donated. City <br />policy has set the capitalization threshold for reporting capital assets at $7,500. Depreciation is recorded <br />on a straight-line basis over estimated useful lives of the assets as follows: <br /> <br />Buildings 50 years <br />Improvements other than buildings 20 years <br />Machinery and equipment 5-15 years <br />Licensed Vehicles 3-15 years <br />Infrastructure 20-50 years <br /> <br />In June 1999, the GASB issued Statement No. 34 which requires the inclusion of infrastructure capital <br />assets in local governments’ basic financial statements. In accordance with GASB Statement No. 34, the <br />City included all infrastructures into the 2014-15 Basic Financial Statements. <br /> <br />The City defines infrastructure as the basic physical assets that allow the City to function. The assets <br />include streets, sewer, and park lands. Each major infrastructure system can be divided into subsystems. <br />For example the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, <br />streetlights, landscaping and land. These subsystems were not delineated in the basic financial <br />statements. The appropriate operating department maintains information regarding the subsystems. <br /> <br />Interest accrued during capital assets construction, if any, is capitalized for the business-type and <br />proprietary funds as part of the asset cost. <br /> <br />For all infrastructure systems, the City elected to use the Basic Approach as defined by GASB Statement <br />No. 34 for infrastructure reporting. Original costs were developed in one of three ways: (1) historical <br />records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost <br />indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current <br />date. The accumulated depreciation, defined as the total depreciation from the date of <br />construction/acquisition to the current date on a straight line, un-recovered cost method was computed <br />using industry accepted life expectancies for each infrastructure subsystem. The book value was then <br />computed by deducting the accumulated depreciation from the original cost. <br />47