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Center of Colorado Water Conservancy District <br />Notes to Financial Statements <br />December 31, 2009 <br />NOTE A — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES <br />5. Successful Efforts Basis of Accounting- continued <br />result in an option to purchase or acquire as unsuccessful rights effort expenditures in <br />the basic financial statements. <br />Expenditures to acquire acreage, drill wells, perform hydrological tests, build <br />infrastructure (includes headgates and storage facilities, diversion channels, etc.), lega <br />and professional fees relating to Water Court adjudication, all to determine the <br />transferable average annual yield of acre feet of water are capitalized and per is <br />evaluated for any impairment. <br />6. Equipment, Water Rights and Storaae Facilities <br />Purchased or constructed fixed assets a /k/a capital assets are reporte at co t. <br />Donated fixed assets are recorded at their estimated fair value aJAhe d t" I, onation. <br />The cost of normal repairs and maintenance that do not incr&k cupacity or efficiency <br />or materially extend the assets' lives are not capitalized. <br />Equipment, water rights and related storage facilities a ch ed from general fund <br />expenditures but are not recorded in the govern tal d dance sheet. The total <br />cost of fixed assets, net of depreciation is rep d the overnment -wide financial <br />statement -net assets, and the annual depre ' o f " "e is reported in the government- <br />wide financial statement - statement of act" °ties. <br />Tangible personal property is deprecited usi ' the straight -line method, midmonth <br />convention over the estimated us $. Inexhaustible capital assets and intangible <br />assets with indefinite useful liv , r 4nopreciated. A summary of the assets and <br />their depreciable lives follow <br />Depreciable Prop Lives rs <br />Computer 5 <br />Head gates 50 <br />Storage F c 20 <br />Lease ho Improv ments 40 <br />There i e a d salvage value. <br />wptbr is a intangible with indefinite lives and the water storage facilities are <br />n k r ti ' e. The Smelter Pipeline (storage facility) is being re -lined and enlarged and <br />stil u er development, analogous to construction in progress. <br />et Assets. Restrictions Thereon and Reservation of Fund Balance <br />et assets are the difference between assets and liabilities and are reported in the <br />accompanying statement of net assets. Net assets invested in capital assets are <br />resources used to acquire equipment and develop water rights and storage facilities and <br />are reduced by the outstanding balances of notes payable used for acquiring these <br />capital assets. <br />Reservation of general fund balances and restriction of net assets is recorded for the <br />restricted legal use of these monies for emergency purposes as defined in enabling <br />12 <br />