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CITY OF SUNNY ISLES BEACH, FLORIDA <br />NOTES TO FINANCIAL STATEMENTS <br />FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2023 <br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br />K. CAPITAL ASSETS (CONTINUED) <br />The costs of normal maintenance and repairs that do not add to the value of the asset or <br />materially extend assets' lives are not capitalized. Major outlays for capital assets and <br />improvements are capitalized as projects are constructed. <br />Capital assets of the City are depreciated/amortized using the straight-line method over the <br />following estimated useful lives: <br />Capital Asset Classes <br />Buildings <br />Improvements <br />Machinery and equipment <br />Infrastructure <br />Leases (right -to -use assets) <br />Subscription (right -to -use assets) <br />Years <br />15 - 50 years <br />10 - 20 years <br />3 - 20 years <br />15 - 100 years <br />Through lease maturity <br />Through subscription maturity <br />The City reviews the carrying value of its long-lived assets to ensure that any impairment <br />issues are identified and appropriately reflected in the financial statements. Should the <br />expected cash flows be less than carrying value, an impairment loss would be recognized to <br />reduce the carrying value. There was no impairment loss recorded during the current fiscal <br />year. <br />L. LEASE (RIGHT-TO-USEAssm) <br />The leases (right -to -use assets) are initially measured at an amount equal to the initial <br />measurement of the related lease liability plus any lease payments made prior to the lease <br />term, less lease incentives, and plus ancillary charges necessary to place the lease into <br />service. The leases (right -to -use assets) are amortized on a straight-line basis over the life of <br />the related lease. <br />M. SUBSCRIPTION (RIGHT-TO-USEASSETS) <br />The subscription (right -to -use assets) are initially measured at an amount equal to the initial <br />measurement of the related subscription liability plus any subscription payments made prior <br />to the subscription term, less subscription incentives, plus any ancillary charges necessary <br />to place the subscription into service. The subscription (right -to -use assets) are amortized <br />on a straight-line basis over the life of the related contract. <br />32 <br />