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EASTON AREA
SCHOOL DISTRICT
No. 622
SECTION:
FINANCES
TITLE:
GASB STATEMENT 34
ADOPTED:
October 19, 2006
REVISED:
622. GASB STATEMENT 34
1.
Purpose
SC 613
The Board recognizes the need to implement the required accounting and financial
reporting standards stipulated by the Pennsylvania Department of Education.
The primary objectives of implementing the GASB Statement 34 are to assure
compliance with state requirements, and properly account for both the financial and
economic resources of the district.
2.
Authority
SC 218
Participation of the school district in any such activity shall be in accordance with
Board policy.
3.
Delegation of
Responsibility
The responsibility to coordinate the compilation and preparation of all information
necessary to implement this policy is delegated to the Business Manager.
The designated individual shall be responsible for implementing the necessary
procedures to establish and maintain a fixed asset inventory, including depreciation
schedules. Depreciation shall be computed on a straight-line basis over the useful
lives of the assets, using an averaging convention. Normal maintenance and repairs
shall be charged to expense as incurred; major renewals and betterments that
materially extend the life or increase the value of the asset shall be capitalized. A
schedule of accumulated depreciation shall be consistent from year to year. The
basis for depreciation, including groups of assets and useful lives, shall be in writing
and submitted for review to the Board and independent auditors.
The Business Manager shall prepare the required Management Discussion and
Analysis (MD&A). The MD&A shall be in the form required by GASB Statement
34 and shall be submitted to the Board for approval, prior to publication.
Prior to submission of the MD&A for Board approval, the district's independent
auditors shall review the MD&A, in accordance with SAS No. 52, "Required
Supplementary Information".
622. GASB STATEMENT 34 - Pg. 2
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4.
Guidelines
In order to associate debt with acquired assets and to avoid net asset deficits, any
asset that has been acquired with debt proceeds shall be capitalized, regardless of the
cost of the asset. The asset life of these assets shall be considered relative to the time
of the respective debt amortizations.
For all other assets not acquired by debt proceeds, the dollar value of any single item
for inclusion in the fixed assets accounts shall be not less than $4,000.
The capitalization threshold shall be set at a level that will capture at least eighty
percent (80%) of all fixed assets.
The assets listed below do not normally individually meet capitalization threshold
criteria:
1.
Library books.
2.
Classroom texts.
3.
Computer equipment.
4.
Classroom furniture.
These asset category costs shall be capitalized and depreciated as groups when that
group's acquisition cost exceeds the capitalization threshold in any given fiscal year.
For group asset depreciation purposes, the estimated useful life of the group may be
based on the weighted average or simple average of the useful life of individual
items, or on an assessment of the life of the group as a whole. Periodically, the
district shall review the estimated life of groups of assets and adjust the remaining
depreciation life of the group.
Assets that fall below the capitalization threshold for GASB 34 reporting purposes
may still be significant for insurance, warranty service, and obsolescence/
replacement policy tracking purposes. The district may record and maintain these
non-GASB 34 asset inventories in subsidiary ledgers.
School Code
218, 613