Policy Overview Define Capital Assets A capital asset is a type of asset that is not easily sold in the regular course of operations for cash and is generally owned for its role in contributing to the entities ability to generate profit. Furthermore, it is expected that the benefits gained from the asset will extend beyond a time span of one year. On a balance sheet, capital assets are represented by the property, plant and equipment figure. Examples include land, buildings, machinery, etc. Generally, these are assets that cannot be quickly liquidated. For all intents and purposes, the term asset for this policy will refer to capital assets. Assets by Fund Type Governmental capital assets are assets purchased by any governmental fund such as, the General Fund, state or federal special revenue, debt service, capital projects or permanent funds. Governmental capital asset activity is recorded in the Entitywide Ledger of General Ledger (GL). Proprietary capital assets are assets purchased by any proprietary fund such as enterprise or internal service funds, or by a non-agency fiduciary fund. Proprietary capital asset activity is recorded in the Actuals Ledger of GL. Agency funds (07XXX) are used to report resources held by the State of Montana in a purely custodial capacity. Therefore, no capital assets should be reported in agency funds. Capital asset balance sheet accounts The balance sheet accounts used for capital assets are found in the 17XX and 18XX ranges. All activity in these accounts should be created though generated entries (rather than direct entries into the GL). Definitions Table Alternate Alternative livestock, as defined in section 87-4-406 MCA, is Livestock defined as privately owned caribou, deer, elk, antelope, mountain sheep/goat, reindeer or any other cloven-hoofed ungulate. Building Significant alterations or structural changes that increase the Improvements usefulness, efficiency or asset life of existing buildings. Since these are not buildings in their own right they must be capitalized as building improvements. Capital/Fixed Assets of a relatively permanent nature with a useful life of Assets more than one year whose identity does not change with use. The unit must be identifiable and accounted for separately. Capital Capital livestock is defined as livestock purchased for the Livestock addition to the flock or herd maintained for instruction or perpetuation/improvement. Such livestock are capitalized at fair market value if the aggregate value of the livestock exceeds the capitalization threshold. The value is only changed if livestock
Policy Overview Define Capital Assets A capital asset is a type of asset that is not easily sold in the regular course of operations for cash and is generally owned for its role in contributing to the entities ability to generate profit. Furthermore, it is expected that the benefits gained from the asset will extend beyond a time span of one year. On a balance sheet, capital assets are represented by the property, plant and equipment figure. Examples include land, buildings, machinery, etc. Generally, these are assets that cannot be quickly liquidated. For all intents and purposes, the term asset for this policy will refer to capital assets. Assets by Fund Type Governmental capital assets are assets purchased by any governmental fund such as, the General Fund, state or federal special revenue, debt service, capital projects or permanent funds. Governmental capital asset activity is recorded in the Entitywide Ledger of General Ledger (GL). Proprietary capital assets are assets purchased by any proprietary fund such as enterprise or internal service funds, or by a non-agency fiduciary fund. Proprietary capital asset activity is recorded in the Actuals Ledger of GL. Agency funds (07XXX) are used to report resources held by the State of Montana in a purely custodial capacity. Therefore, no capital assets should be reported in agency funds. Capital asset balance sheet accounts The balance sheet accounts used for capital assets are found in the 17XX and 18XX ranges. All activity in these accounts should be created though entries (rather than direct entries into the GL). Definitions Table Alternate Livestock Alternative livestock, as defined in section 87-4-406 MCA, is defined as privately owned caribou, deer, elk, antelope, mountain sheep/goat, reindeer or any other cloven-hoofed ungulate. Building Improvements Significant alterations or structural changes that increase the usefulness, efficiency or asset life of existing buildings. Since these are not buildings in their own right they must be capitalized as building improvements. Capital/Fixed Assets Assets of a relatively permanent nature with a useful life of more than one year whose identity does not change with use. The unit must be identifiable and accounted for separately. Capital Livestock Capital livestock is defined as livestock purchased for the addition to the flock or herd maintained for instruction or perpetuation/improvement. Such livestock are capitalized at fair market value if the aggregate value of the livestock exceeds the capitalization threshold. The value is only changed if livestock generated