Page 401 - FortWorthFY22AdoptedBudget

The City uses the straight-line method of depreciation and a full month of
depreciation is taken in the original month of acquisition or capitalization. To
calculate depreciation expense using the straight-line method:
Annual Depreciation = Cost – Salvage Value
Asset Useful life (in years)

Salvage value is an estimate of the amount that will be realized at the end of useful
life of a depreciable asset. The City may assume that salvage value will be
insignificant and therefore, will not use it in the depreciation calculation.

Asset must be depreciated according to the useful life guidelines established by
the City. These guidelines are summarized below:

• Buildings: 20 - 50 years

• Infrastructure: 20 - 60 years

• Machinery and Equipment: 2 - 20 years

• Vehicles; 4 –15 years

• Runways and Taxiways: 20 - 30 years

• Water and Sewer Equipment: 5 - 30 years

• Water and Sewer Infrastructure: 25 - 60 years

The following capital assets are not depreciated:

• Land

• Intangible assets with indefinite useful lives

• Construction Work in Progress

Retirement

All capital assets that are sold, exchanged, traded in, donated, stolen, damaged
beyond repair or in any way removed from service and disposed of during the
current fiscal period should be recorded as retirements in the PSAM system.
When retiring an asset, the Department that had custody of the asset must
complete and submit an Asset Retirement Form to the Capital Assets Team. The

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