Current through Register Vol. 35, No. 18, September 24, 2024
A. The
type of service that the asset was purchased for must be used to classify fixed
assets. The object code under which it was purchased is usually a reliable
indicator of the service for which it was purchased.
B. Object codes from the category for capital
outlay may be used. Purchases from other categories may also be capitalized if
appropriate. For example, certain types of repairs or maintenance may increase
the useful life of the asset. These costs should be added to the cost of the
asset.
C. The recommended
classifications and definitions are:
(1)
"Land": Only real property is included in this category. Costs to
be included that are not specifically stated in Subsection B of Section
2.20.1.10
NMAC include fees for appraisals, title searches, attorney's fees, demolition
of structures (less any salvage) as part of site preparation, and agent's
commissions.
(2)
"Land
Improvements": Improvements subsequent to the acquisition of land are in
this category. Such assets have a limited economic life. Examples are roadways,
landscaping, utility infrastructure, and fencing. This category may also be
used to record leasehold improvements. Leasehold improvements should be
capitalized to recognize the allocation of the cost of the improvements for the
duration of their useful lives.
(3)
"Buildings and Structures": This category shall be used for all
buildings and structures that are permanently fixed to land.
(4)
"Furniture and Fixtures":
These are assets that are not permanently fixed to land, but are the contents
of a building.
(5)
"Information Technology Equipment" (including software): This
category of equipment includes computers and peripherals, and all equipment
related to electronic communications.
(6)
"Equipment and Machinery":
Equipment that is related to industrial production, construction, land or
grounds maintenance, food service, public safety should be recorded in this
category.
(7)
"Farm
Equipment": All equipment related to agricultural or ranch production
should be recorded in this category.
(8)
"Livestock and Poultry":
This category is only used for farm or ranch animals that are not purchased for
immediate consumption or production of food.
(9)
"Library and Museum
Acquisitions": Assets in this category only include holdings of
libraries or museum collections. A publication that is available in a library
but that is acquired by an agency for its private use would be appropriately
categorized as furniture and fixtures. Similarly, a farm museum would use this
classification for tractors and ploughs, even if they are used for their
intended purpose.
(10)
"Motor
Vehicles and Aircraft": This category is for all such vehicles that the
agency owns. Vehicles and aircraft acquired under the terms of an operating
lease should not be recorded as fixed assets.
D. Agencies may use these fixed asset
classifications for the purpose of pooling assets for depreciation, for
publication in financial statements, or other management objectives.
