This is the exact embedded text of the captured official document.
Snapshot 62a80dc53b50 · verified 2026-06-05 ·
original document ·
archived snapshot ·
unofficial consolidation, the official version is held by the municipal clerk.
POLICY NO. 63
MUNICIPALITY OF THE DISTRICT OF BARRINGTON
TANGIBLE CAPITAL ASSETS POLICY
1.
ACCOUNTING METHOD
Capital assets are valued at original cost when available, or at the 2009 assessed value
discounted to the date of purchase, using the Consumer Price Index for Canada. Assets
are recorded on the "single asset" basis for larger systems such as sewers, building, and
arenas.
2.
CLASSES OF CAPITAL ASSETS
Assets are classified according to the schedule in Appendix "A".
3.
AMORTIZATION METHOD AND USEFUL LIFE
The straight-line method of amortization is used for all capital assets except land. Useful
life of assets is determined according to the schedule attached as Appendix "B".
4.
CAPITALIZATION THRESHOLD
Expenditures of $5,000.00 or more are capitalized when capital assets are purchased or
improved, extending their useful life.
5.
RESIDUAL VALUE
Residual values of capital assets are deemed to be nil, except for assets acquired by long
term lease agreements. Leased assets are deemed to have a useful life equivalent to the
term of the lease.
APPENDIX "A"
INVENTORY FORMS
CLASSIFICATION OF CAPITAL ASSETS
Land
Real Property in the form of a plot, lot or area. Includes all expenditures made to acquire land
and to ready it for use where the improvements are considered permanent in nature and includes
purchase, closing costs, grading, filling, draining, and clearing, removal, of old buildings (net of
salvage), assumption of liens or mortgages, and any additional land improvements that have an
indefinite life. The costs associated with improvements to land are added to the cost of the land
if those improvements can be considered permanent (such as re-grading or filling of the land).
Excludes forests, water and other mineral resources and land held for resale (a separate
non-financial asset). Land includes land for administrative buildings, parks, playgrounds, fields,
open spaces, treatment plants.
Land associated with roads, sewer lines, and sidewalks are assumed to be part of their respected
assets (example roads) with no value associated to it.
Land Improvements
Land improvements consist of betterments, site preparation and site improvements (other than
buildings) that ready land for its intended use, which generally decay or break down over time.
Land improvements that are removable and can degrade or deplete over the course of time
through use or due to the elements, should be separately capitalized and their value amortized
over the useful life of the improvements.
Examples are: landfill site development, retaining walls, soccer fields, parking lots, grading at
works yards whose purpose is to serve as a base for maintaining infrastructure.
Municipal Buildings
Structures that provide shelter from the elements. Includes capital and betterments to buildings
owned by the municipality. Includes equipment that is not capable of being moved. Examples
are: sport facilities, office buildings, and libraries.
Buildings - Plants
Structures that provide shelter from the elements and are used to provide sewer or water
treatment. Includes capital and betterments to buildings owned by the municipality. Includes
equipment that is not capable of being moved.
Electronic Data Equipment
Major IT equipment and computer programs.
Small Equipment
Major office equipment items such as photocopiers, desks, furniture.
Machinery & Equipment
An apparatus, tool, device, implement or instrument that likely uses energy (human, electrical,
hydroelectric fuel, or thermal) to facilitate a process, function or completion of a task. It may be
installed within a building but is generally capable of being moved and reinstalled at a different
location. Included in this category are heavy-duty vehicles, construction vehicles, busses, boats
(excluding ferries) and compost bins.
Vehicles
All other means of transportation, usually having wheels for transporting persons or things or
designed to be towed behind such apparatus.
Ferries
Self-explanatory
Wharves
Self-explanatory
Streets, Roads & Curbs
Cost of materials and labour used to construct roads and curbs.
Traffic and Street Lights
Traffic lights and crosswalk lights.
Sidewalks
Cost of materials and labour used to construct sidewalks.
Sewer Lines
Cost of materials and labour used to construct sewer lines.
Lagoons
Cost of materials and labour used to construct lagoons.
Fibre Optic Lines
Cost of materials and labour used to construct fibre optic lines.
Landfills
Cost of materials and labour, other than those costs associated with land, used to construct
landfills.
Work in Progress
Cost of assets under construction or in an uncompleted process of acquisition and are not yet in
service.
APPENDIX "B"
AMORTIZATION METHOD AND USEFUL LIFE
The Tangible Capital Asset Committee reviewed amortization methods and useful life ranges
currently being used across Canada, both Provincially and Municipally. Based on this review,
the most predominant amortization method being used is straight-line (See Section 7 re:
discussion of amortization methods).
The straight-line method is the simplest for municipal accounting purposes and should be
applicable to most Tangible Capital Asset categories. Alternative approaches can be applied to
individual assets categories if necessary, but should be evaluated on a case-by-case basis.
With regard to useful lives, the following table by class was developed on the review across
Canada. Where a range is listed, each municipal unit will be required to pick a useful life for
this municipal unit. It should be mentioned that you should be consulting with your auditors as
they will have to sign off on your financial statements and will have to agree with your
methodology in determining your useful life for your assets.
Asset Type
Useful Life Ranges
Land
Indefinite
Land Improvements
20 - 25 Years
Municipal Buildings
40 Years
Buildings - Plants
20 - 25 Years
Electronic Data Equipment
3 - 5 Years
Small Equipment
5 Years
Machinery and Equipment
10 - 15 Years
Vehicles
5 Years
Ferries
30 Years
Wharves
25 Years
Streets, Roads & Curbs
25 - 30 Years
Traffic & Street Lights
25 - 30 Years
Sidewalks
20 - 25 Years
Sewer Lines
50 Years
Lagoons
50 Years
Fibre Optic Lines
5 - 10 Years
Landfill*
See PSAB 3270
Work in Progress**
Not Applicable
* Landfills should be amortized as per PS 3270, which recommends the operating life of the site
be based on volume.
** Work in Progress is not amortized until the asset is complete at which time it will move into a
category listed above.
APPENDIX "C"
THRESHOLDS
The Tangible Capital Asset Committee identified the common thresholds currently being used
across Canada, both Provincially and Municipally. Generally, thresholds are set by either
population or revenue. The most common method used is based on revenues. The suggested
thresholds in the chart below are the minimum values municipalities should use when
determining whether or not to capitalize a tangible capital asset. As these are suggested as
minimum thresholds, each municipality can decide to use a larger threshold if they so choose.
Revenue < $5,000,000
Revenue > $5,000,000 and < $15,000,000
Revenue > $15,000,000
Minimum Threshold
$2,500
Minimum Threshold
$5,000
Minimum Threshold
$10,000
Clerk's Annotation for Official Policy Book
Date of Notice to Council Members: April 12, 2010
Date of Passage of Policy: April 26, 2010
I certify that this Policy was adopted by Council as indicated above.
Clerk
Date