5.3. ERMUSR 01-13-2004 - Laserfiche WebLink

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December 18, 2003 TO: Bryan Adams, General Manager FROM: Patricia Hemza, Office Manager RE: GASB 34 Please find the attached Capital Asset Guide, which will be our document to comply with Governmental Accounting Standards Board (GASH) Statement 34. The document is the same as the Guide used by the Ciry of Elk River, with adaptation for specifics of the Utility. The depreciation schedules have remained the same, and some of our plant accounts have been combined for purposes of meeting thresholds, and for reporting. ERMU has in fact, been compliant in most cases for the past twenty years. All fixed assets of the electric and water for the ERMU have been tracked since inception, and depreciation properly recorded. In some cases, there will be expenses that do not meet the capital dollar amount threshold, which will have some impact on the P & L, but at this time it is unclear how much the effect will be. In any case, in four to five years, the depreciation expense, and the expensing of lower costs, once considered capital, and now maintenance, will even out. In conclusion, the changes are good, and will actually simplify certain accounting functions, with the clearly stated rules. The Elk River Municipal Utilities Commission will need to adopt the GASB 34 Policy.