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Town of Palisade, Colorado <br /> NOTES TO FINANCIAL STATEMENTS <br /> December 31, 2009 <br /> NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- CONTINUED <br /> ' 7. Capital Assets <br /> Capital assets, which include property, plant and equipment are defined by the Town as assets with an <br /> initial, individual cost of at least $3,000 and an estimated useful life in excess of two years. Such assets are <br /> ' recorded at historical cost. Donated capital assets are recorded at estimated fair market value at the date of <br /> donation. <br /> Depreciation is provided on the straight-line method over the assets estimated useful lives, as follows: <br /> Water distribution and collection system 10—60 years <br /> 1 Sewer collection and treatment system 10—50 years <br /> Buildings and building improvements 10— 100 years <br /> Swimming pool 15 —40 years <br /> Equipment and furniture 5—20 years <br /> 8. Cash and Cash Equivalents <br /> For purposes of the statement of cash flows, the Town considers investments purchased with a maturity of <br /> three months or less to be cash equivalents. <br /> 9. Receivables and Payables <br /> The Town has no interfund loans. Balances outstanding between funds are reported as "due to/from other <br /> funds". Residual balances outstanding between the governmental activities and business-type activities are <br /> ' reported in the government-wide financial statements as "internal balances". <br /> Emergency service receivables are shown net of an allowance for uncollectible accounts. Property tax, <br /> Water Fund and Utility Fund accounts receivable do not have an allowance for uncollectible accounts as <br /> 111 the receivables are considered to be fully collectible. <br /> 10. Inventory <br /> Inventory consists of supplies and materials for the Water Fund. Inventory is recorded at cost using the <br /> first-in first-out method. <br /> 11. Compensated Absences <br /> Full-time employees accrue twelve (12) to twenty-four (24) vacation days per year depending on years of <br /> service. Accrued and unpaid vacation earned is paid upon termination and is recognized as a current <br /> liability in all of the funds. Accrued sick leave is not accrued as it is only payable upon termination by <br /> direction of the Board of Trustees. <br /> ' 12. Long-term Obligations <br /> In the government-wide financial statements, and proprietary fund types in the fund financial statements, <br /> long-term debt and other long-term obligations are reported as liabilities in the applicable governmental <br /> ' activities,business-type activities, or proprietary fund type statement of net assets. <br /> I <br /> -23- <br />