Page 50 - 2019-20 CAFR

Rogue Community College

Notes to Basic Financial Statements
Year ended June 30, 2020

1. Summary of Significant Accounting Policies (continued)

Receivables (continued)

Allowable unreimbursed expenses from grantor agencies are reflected in the financial statements as
receivables and revenues. Grant revenues are recorded at the time eligible expenses are incurred.

Grant funds received prior to the occurrence of qualifying expenses are recorded as unearned
revenue.
Inventory
The value of the Bookstores’ inventory is calculated using the retail inventory method. This method
calculates inventory value by taking the total retail value of the items originally in inventory,
subtracting the total sales, then multiplying that dollar amount by the cost‐to‐retail ratio (the

percentage by which goods are marked up from their wholesale purchase price to their retail sales
price). Physical inventory is performed periodically to ensure the value of the inventory is calculated
accurately.

Capital Assets

Capital assets include land, buildings and building improvements, furniture and equipment,

infrastructure (which includes utility systems), library collections, software and construction in
progress. The College’s capitalization policy is to capitalize all assets when they have a life of more

than one year and meet the capitalization thresholds. The College's capitalization threshold for library

collections is $0, furniture and equipment is $5,000, and for all of the other categories is $50,000.

Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.

Per GASB 72, donated capital assets are recorded at acquisition value at the date of donation. The
costs of normal maintenance and repairs that do not add to the value or functionality of an asset’s life
is not capitalized; instead, they are expensed as incurred.
Buildings, furniture and equipment, infrastructure, library collections and software are depreciated
using the straight‐line method over the following useful lives:
Building and building improvements 35‐60 years
Infrastructure 25‐100 years
Furniture and equipment 5‐10 years
Library collections 7‐10 years
Software 5 years

Under GASB, governments are encouraged, but not required to capitalize and depreciate artwork and
historical treasures if it meets all of the following conditions:

1. The collection is held for public exhibition, education, or research in furtherance of public
service, rather than financial gain.

2. The collection is protected, kept unencumbered, cared for and preserved.

3. The collection is subject to an organizational policy that requires the proceeds from sales

of collection items to be used to acquire other items for collections.

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