59 / 144
49
For the year ended December 31, 2016
[tabular amounts in thousands of dollars]
NOTESTOTHE CONSOLIDATED
CITY OF SURREY
FINANCIAL STATEMENTS
1.
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
j) Non-financial assets
Non-financial assets are not available to discharge existing liabilities and are held for use in the provision of services. They have
useful lives extending beyond the current year and are not intended for sale in the ordinary course of operations.
i) Tangible capital assets
Tangible capital assets are recorded at cost, which includes all amounts that are directly attributable to acquisition,
construction, development or betterment of the asset. The cost, less residual value, of the tangible capital assets, excluding
land, are amortized on a straight line basis over their estimated useful lives as follows:
ASSET
USEFUL LIFE - YEARS
Land improvements
12 - 60
Buildings and improvements
10 - 50
Infrastructure
10 - 100
Machinery and equipment
5 - 40
Annual amortization is charged commencing on the date the asset is acquired or available for use. Work-in-progress amounts
are not amortized until the asset is put into service.
ii) Interest capitalization
The City does not capitalize interest costs associated with the acquisition or construction of a tangible capital asset except for
development properties of SCDC.
iii) Contributions of tangible capital assets
Tangible capital assets received as contributions are recorded at their fair value at the date of receipt and are recorded as
revenue. These assets include some land, road infrastructure, water and wastewater infrastructure, machinery and equipment
assets.
iv) Intangible assets
Intangible assets, including works of art and historic assets are not recorded as assets in these financial statements.
v) Leases
Leases are classified as capital or operating leases. Leases that transfer substantially all the benefits and risks incidental
to ownership of the property are accounted for as capital leases and the related asset and obligation are recorded on the
statement of financial position. All other leases are accounted for as operating leases and the related lease payments are
expensed as incurred.
vi) Inventories of supplies
Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost.
k) Use of estimates
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported
amounts of revenues and expenses during the period. Significant estimates include assumptions used in estimating contributed
tangible capital assets, developer contributions, useful lives for amortization, provisions for accrued liabilities, contingencies and in
performing actuarial valuations of employee future benefits.
Actual results could differ from these estimates.