HomeMy WebLinkAbout~Master - Amendment to Purchasing Policies and Procedures re: fixed assets RESOLUTION NO. 02-068
RESOLUTION APPROVING AMENDMENT TO
PURCHASING POLICIES AND PROCEDURES TO CHANGE
THE DEFINITION OF A"FIXED ASSET"
FOR THE CITY OF AMES,IOWA
WHEREAS, in June 199, the Governmental Accounting Standards Board (GASB) issued Statement
No.34 that established a new financial reporting framework,or governmental financial reporting model,for state
and local governments; and,
WHEREAS,this will result in the most significant change in the history of public-sector accounting and
financial reporting; and,
WHEREAS,the City will be required to implement the new reporting model for the fiscal year ending
June 30, 2002; and,
WHEREAS,as part ofthe implementation of GASB 34,we have been reviewing our financial accounting
systems and have identified several accounting changes that will facilitate the implementation of the new
reporting standards; and,
WHEREAS, there will be a major change required in fixed asset reporting that will require the
accumulation of additional information not currently available in our accounting records; and,
WHEREAS, one of the most controversial changes as a result of GASB 34 concerns capitalization and
depreciation of fixed assets, including infrastructure in governmental funds; and,
WHEREAS, the City's current capitalization threshold is $500,but the Government Finance Officers
Association recommends that the fixed asset threshold for local governments be set at$5,000; and,
WHEREAS,the$5,000 threshold is in compliance with federal grant requirements,and the adoption of
a$5,000 capitalization threshold will reduce the value of fixed assets on our financial reports by only five percent
while reducing the number of fixed asset line items by 86 percent; and,
WHEREAS, this will greatly reduce the time and costs that will be required to record and depreciate
assets and will still maintain financial reporting requirements.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ames, Iowa, that the
amendment to the Purchasing Policies and Procedures to change the definition of a "fixed asset" is hereby
approved and will read as follows: "Fixed Assets" Individual items or infrastructure, either original or
replacement, that have a useful life expectancy of at least two years and a cost of$5,000 or more."
ADOPTED THIS 12th day of February, 2002.
Diane R.Voss,City Clerk Ted Tedesco,Mayor
Introduced by: Goodhue
Seconded by: Hoffman
Voting aye: Cross, Goodhue,Hoffinan,Quirmbach,Vegge,Wirth
Voting nay: None Absent: None
Resolution declared adopted and signed by the Mayor this 12t'day of February,2002.