0953RESOLUTION NO. 953
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ROLLING HILLS ESTABLISHING AN ASSET
CAPITALIZATION POLICY
WHEREAS, Government Accounting Standards Board (GASB) Statement No. 34, Basic
Financial Statements - and Management's Discussion and Analysis - for State and Local
Governments, requires State and Local Government to include the original cost of fixed assets
in the statement of net assets as part of the government -wide financial statements; and
WHEREAS, an asset capitalization policy is necessary to establish a reasonable
capitalization threshold for all types of assets and this policy should facilitate depreciating
those assets over their estimated useful lives; and
WHEREAS, a capitalization threshold is the monetary part of the criteria by which an
organization determines whether an asset should be reported on the balance sheet; and
WHEREAS, the Office of Management and Budget (OMB) Circular A-87, Cost
Principles for State and Local and Indian Tribal Governments, Attachment B, section 19(a)(2)
and 19(d) allows property costing up to $5,000 to be charged to federal grants as supplies,
rather than capital outlay without specific awarding agency approval; and
WHEREAS, depreciation represents the recognition of the cost of an asset over time, by
calculating its estimated loss in value during each accounting period; and
WHEREAS, GASB Statement No. 34 allows local government to use any established
depreciation method;
NOW, THEREFORE, BE IT RESOLVED that in accordance with GASB Statement No.
34, the City of Rolling Hills Finance Department will:
• Capitalize all assets purchased which have a normal life of at least one year with a
per-unit cost of $5,000 or more; and
• Capitalize all site and building improvementswith a cos of $5,000 or more; and
• Utilize the straight-line method of depreciation overt estimated useful life for all
classes of assets.
PASSED, APPROVED AND ADOPTED THIS 28th OF J E, 004.
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ATTEST:
k, o h rv-J
MARILYN RN, DEPUTY CITY CLERK
Resolution No. 953. -1-
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) §§
CITY OF ROLLING HILLS) )
I certify that the foregoing Resolution No. 953 entitled:
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ROLLING HILLS ESTABLISHING AN ASSET
CAPITALIZATION POLICY
was approved and adopted at a regular meeting of the City Council on June 28, 2004,
by the following roll call vote:
AYES: Councilmembers Black, Hill, Lay, Mayor Pro
Tem Pernell and Mayor Heinsheimer.
NOES: None.
ABSENT: None.
ABSTAIN: None-.
and in compliance with the laws of California was posted at the following:
Administrative Offices
DEPUTY CITY CLERK
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Resolution No. 953 -2-