City of Surrey's Annual Financial Report 2021

NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS CITY OF SURREY

For the year ended December 31, 2021 [tabular amounts in thousands of dollars]

1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

o) 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 over one or more future periods and are not intended for sale in the ordinary course of operations. Tangible capital assets Tangible capital assets are recorded at cost, which includes amounts that are directly related to the acquisition, design, construction, development, improvement, or betterment of the assets. Cost includes overhead charges related to construction and development that are directly attributable to the acquisition or construction of the asset. The City does not capitalize interest associated with the acquisition or construction of a tangible capital asset. i)

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 – 100 10 – 60

Buildings and building improvements

Leasehold improvements Infrastructure: Roads and road structures

2 – 25

5 – 100 10 – 100

Water, Sewer and Drainage systems

Machinery and equipment: Vehicles

5 – 30 4 – 25 3 – 50

Technology

Furniture & equipment

Annual amortization commences on the date the asset is acquired or available for use. Assets under construction are not amortized until the asset is put into service and available for productive use.

Tangible capital assets received as contributions are recorded at their estimated fair value at the date of receipt and are recorded as revenue.

Works of art and historic assets are not recorded as assets in the consolidated financial statements.

Where an estimate of fair value is not determinable, the tangible capital asset is recognized at a nominal value.

ii) Inventories of supplies Inventories of supplies held for consumption are recorded at the lower of cost and replacement cost.

iii) Prepaid expenses Prepaid expenses of supplies or services held for consumption are recorded at the lower of cost and replacement cost.

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