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Reporting Capital Assets <br /> Capital assets should be recorded and reported at their historical costs,which include the <br /> vendor's invoice (plus the value of any trade-in or allowance, if reflected on the invoice), <br /> plus sales tax, initial installation cost(excluding in-house labor)modifications, <br /> attachments, accessories or apparatus necessary to make the asset usable and render it <br /> into service. Historical costs also include ancillary charges such as freight and <br /> transportation charges, site preparation costs, and professional fees. <br /> When the historical cost of a capital asset is not practicably determinable,the estimated <br /> historical cost of the asset should be determined by appropriate methods and recorded. <br /> Estimated historical cost should be so identified in the record and the basis of <br /> determination established in the responsible entity's public records. The basis of <br /> valuation for capital assets constructed by entity personnel should be the costs of <br /> material, direct labor and overhead costs identifiable to the project. An entity that owns <br /> capital assets is responsible for correctly reporting these assets at the date of acquisition. <br /> Donated capital assets should be reported at fair value I at the time of acquisition plus <br /> ancillary charges, if any. Donations are defined as voluntary contributions of resources to <br /> a governmental entity by a nongovernmental entity.2 <br /> Depreciating Capital Assets <br /> New to general governmental capital assets is the requirement to depreciate those assets <br /> over their estimated useful lives. Depreciation is the process of allocating the cost of an <br /> asset over the periods that asset is used for its intended purpose. <br /> Capital assets should be depreciated over their estimated useful lives unless they are: <br /> • Inexhaustible (i.e., land and land improvements, certain works of art and <br /> historical treasures), <br /> • Infrastructure assets reported using the modified approach, or <br /> • Construction work in progress <br /> 'Fair value is the amount at which an asset could be exchanged in a current transaction between willing <br /> parties <br /> 2A voluntary contribution of resources between governmental entities is not a donation. <br /> 3 <br /> 63 <br />