Accordingly, write-downs of property and equipment occur periodically as a result of adjusting assets to their estimated fair values.
(See paragraph 30.95.) Prior to 1996, construction costs for improvements or additions to a building were capitalized as part of the original building only if the addition or improvement significantly increased the useful life of the building beyond the current depreciation schedule or added functionality or space, in accordance with generally accepted accounting principles.
121, which was superseded by FASB ASC Topic 360-10; formerly SFAS No.
144, Accounting for the Impairment or Disposal of Long-Lived Assets.
This chapter also gives instructions concerning leasehold improvements and software which are discussed in Deferred Charges (see also paragraph 4.20).
Property and equipment, also referred to as fixed assets, are used in the production and distribution of services by all Federal Reserve Banks.
The Federal Reserve System uses the straight-line method for depreciating fixed assets.
Improvement assets and accumulated depreciation, however, are adjusted if replaced or modified by a subsequent capitalized improvement and charged to depreciation expense.The useful lives and capitalization thresholds discussed in the following paragraphs reflect minimum accounting requirements for Reserve Banks.Based on local experience or practice, Reserve Banks may establish policies authorizing shorter useful lives or lower capitalization thresholds.Asset units should be readily identifiable (subject to verification of existence without disassembly) and provide economic benefit through distinct, substantive functionality.Thus, in some instances, an asset may be an integrated unit made up of components that individually do not provide functionality without connection to the other components.