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City of <br /> PEQUOT <br /> LAKES <br /> ACCOUNTING AND REPORTING POLICIES <br /> March, 2005 <br /> A. MAJOR FUNDS AND FUND GROUPS <br /> Under GASB #34 requirements, the major funds that the City is required to show as <br /> major on our annual financial statements will be: General fund, Fire Department, Sewer <br /> fund and Water fund. All remaining funds are reported as non-major governmental-type <br /> funds. <br /> B. CAPITAL ASSETS <br /> A capital asset is determined to be that with a cost of at least $2500 per asset and a life <br /> expectancy of greater than one year. <br /> The classes of capital assets will be: land,buildings, infrastructure, improvements (other <br /> than buildings), vehicles, and equipment. Construction in Progress will be recognized as <br /> an asset but is not eligible to be depreciated until the project is completed and/or asset is <br /> transferred to the city. <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 fair <br /> 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 '/z year convention, will be the method <br /> used to allocate the cost on a monthly basis. Land, easements and construction in <br /> progress are not considered depreciable assets. The determination of useful life was made <br /> utilizing the following tables: <br /> ACCOUNTING AND REPORTING POLICIES.doc: 5/30/2006 <br /> 1 <br />