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City of <br />Pequot <br />Lakes - - <br />ACCOUNTING AND REPORTING POLICIES <br />A. MAJOR FUNDS AND FUND GROUPS <br />The City will report funds as major according to the GASB #34 requirements. In <br />addition, the City has the discretion to show additional major funds (i.e. fire <br />fund). All remaining funds are reported as non -major governmental -type funds. <br />B. CAPITAL ASSETS <br />A capital asset is determined to be that with a cost of at least $2500 per asset and <br />a life expectancy of greater than one year. <br />The classes of capital assets will be: land, buildings, infrastructure, improvements <br />(other than buildings), vehicles, and equipment. Construction in Progress will be <br />recognized as an asset but is not eligible to be depreciated until the project is <br />completed and /or asset is transferred to the city. Repairs and/or maintenance <br />expenditures relating to road projects will be capitalized if the remaining useful <br />life of the road is extended by more than 25 %. <br />Thresholds applied to capitalized assets will be at least $2,500. <br />Donations of capital assets from an individual or entity are recorded at estimated <br />fair market value at the date of acquisition for purposes of capitalizing the asset. <br />Depreciation is the allocation of the cost of a depreciable capitalized asset over its <br />estimated useful life. Straight line depreciation 1/2 year convention, will be the <br />method used to allocate the cost on a monthly basis. Land, easements and <br />construction in progress are not considered depreciable assets. The determination <br />of useful life was made utilizing the following tables: <br />