The Buffalo City Council, at their last meeting, approved Resolution No. 1342, making changes to the city's capitalization policy.
City Clerk Julie Silbernagel explained that the city had adopted a capitalization policy as part of their current yearly audit. Since then, she explained, the city has found that the recommended “useful lives” they adopted with the capitalization policy for the city's equipment was not working because the city keeps their equipment much longer than the recommended “useful life” for city assets.
The auditors recommended the city drop the “useful life,” but keep the capitalization threshold and then set up an entirely different “useful life” schedule based on how long the city actually uses the asset.
The change to the capitalization policy drops the recommended “useful life” schedule to allow the city to set up their own.
The second change to the policy was to increase the threshold at which the city needs to capitalize land or building improvements from the existing $5,000 to a higher level.
The council approved Resolution No. 1342.