General Capital Assets; General Long-Term Liabilities; Permanent FundsLearning ObjectivesGCA &GLTL: What We’ve Seen Thus FarGCA-GLTL Accounting EquationCharacteristics of Capital AssetsTypes of Capital AssetsCapital Assets ≠ GCAInitial ValuationOther Acquisition MethodsNormal GCA Classifications (recommended by GFOA)Infrastructure Capital AssetsCapitalization PolicyMinimum Information for Property RecordsOther GCA IssuesImpairment of AssetsIndicators of ImpairmentMeasuring ImpairmentsRestoration Cost ApproachService Units ApproachDeflated Depreciation Replacement Cost ApproachReporting Impairment LossesReporting Insurance RecoveriesSpecial CircumstancesReporting GCAGeneral Long-Term LiabilitiesSlide 26Reporting GLTLPermanent FundsRelationships Requiring Use of a Permanent FundGeneral Capital Assets;General Capital Assets;General Long-Term General Long-Term Liabilities;Liabilities;Permanent FundsPermanent FundsChapter 9Chapter 9Learning ObjectivesLearning Objectives►Understand how to maintain GCA & GLTL information Understand how to maintain GCA & GLTL information for reporting purposesfor reporting purposes►Understand how to account for transactions affecting Understand how to account for transactions affecting GCA & GLTLGCA & GLTL►Understand how GCA & GLTL are relatedUnderstand how GCA & GLTL are related►Account for and report general infrastructure capital Account for and report general infrastructure capital assetsassets►Understand how to apply the modified approach to Understand how to apply the modified approach to infrastructure capital assetsinfrastructure capital assets►Understand GCA & GLTL financial reportingUnderstand GCA & GLTL financial reporting►Understand how to use, account for, & report Understand how to use, account for, & report Permanent FundsPermanent Funds►Account for transactions affecting all Governmental Account for transactions affecting all Governmental Funds, GCA, & GLTLFunds, GCA, & GLTLGCA &GLTL:GCA &GLTL:What We’ve Seen Thus FarWhat We’ve Seen Thus Far►General Capital Assets (GCA)General Capital Assets (GCA)Purchases recorded as expenditures rather Purchases recorded as expenditures rather than fund assetsthan fund assetsSales recorded as Other Financing Sources Sales recorded as Other Financing Sources (OFS)(OFS)►General Long-Term LiabilitiesGeneral Long-Term LiabilitiesIssuance of debt recorded as OFSIssuance of debt recorded as OFSRetirement of debt recorded as Retirement of debt recorded as expenditures or Other Financing Uses (OFU)expenditures or Other Financing Uses (OFU)GCA-GLTL Accounting GCA-GLTL Accounting EquationEquationCharacteristics of Capital Characteristics of Capital AssetsAssets►Used in operations of the government Used in operations of the government (not for resale)(not for resale)►Have useful lives extending beyond a Have useful lives extending beyond a single reporting period (may be single reporting period (may be modified by government’s modified by government’s capitalization policy)capitalization policy)May be tangible or intangibleMay be tangible or intangibleTypes of Capital AssetsTypes of Capital Assets►LandLand►Land improvementsLand improvements►EasementsEasements►BuildingsBuildings►Building Building ImprovementsImprovements►VehiclesVehicles►MachineryMachinery►EquipmentEquipment►Works of artWorks of art►Historical treasuresHistorical treasures►InfrastructureInfrastructureCapital Assets Capital Assets ≠ GCA≠ GCAAll general capital assets are capital assets, All general capital assets are capital assets, but not all capital assets are general but not all capital assets are general capital assets!capital assets!►GCA used by the Governmental Funds GCA used by the Governmental Funds (general government)(general government)►Other capital assets are fund-specific: Other capital assets are fund-specific: used by the Proprietary Funds and Trust used by the Proprietary Funds and Trust FundsFundsInitial ValuationInitial ValuationCostCostInvoice price + Cost of delivery + Invoice price + Cost of delivery + Cost to get asset ready for intended Cost to get asset ready for intended useuseEstimateEstimated costd costUsed when invoice price is unknownUsed when invoice price is unknownFrequent problem for governments Frequent problem for governments with poor inventory recordswith poor inventory recordsGiftsGiftsFair value + Cost of delivery + Cost Fair value + Cost of delivery + Cost to get asset ready for intended useto get asset ready for intended useOther Acquisition MethodsOther Acquisition MethodsForeclosurForeclosureeLower of (1) amount due for taxes, Lower of (1) amount due for taxes, etc. or (2) appraised value of etc. or (2) appraised value of propertypropertyEminent Eminent domaindomainAssign value as if it were a Assign value as if it were a negotiated purchasenegotiated purchaseEscheatEscheatSame manner as giftsSame manner as giftsNormal GCA ClassificationsNormal GCA Classifications(recommended by GFOA)(recommended by GFOA)►LandLand►Buildings or Building ImprovementsBuildings or Building Improvements►InfrastructureInfrastructure►Machinery & EquipmentMachinery & Equipment►Construction in ProgressConstruction in ProgressInfrastructure Capital AssetsInfrastructure Capital Assets►Long lived capital assets that normally Long lived capital assets that normally are stationary in nature and normally are stationary in nature and normally can be preserved for a significantly can be preserved for a significantly greater number of years than most greater number of years than most capital assets. Examples of capital assets. Examples of infrastructure assets include roads, infrastructure assets include roads, bridges, tunnels, drainage systems, bridges, tunnels, drainage systems, water & sewer systems, dams, & water & sewer systems, dams, & lighting systems.lighting systems.Capitalization PolicyCapitalization Policy►Minimum dollar amountMinimum dollar amount►Minimum useful lifeMinimum useful lifeWhatever the government elects to do, Whatever the government elects to do, it must be disclosed in the notesit must be disclosed in the notes1 2Minimum Information forMinimum Information forProperty RecordsProperty Records►Property system ID Property system ID numbernumber►Serial number, etc.Serial number, etc.►Abbreviated descriptionAbbreviated description►Date of acquisitionDate of acquisition►Name and address of Name and address of