Page 36 - BAA CAFR 2017

BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS

NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

G. Capital Assets
Capital assets are recorded at cost, except for property contributed by third
parties, which is recorded at fair value at date of contribution, less
accumulated depreciation. Depreciation has been provided over the
estimated useful lives using the straight-line method.

Estimated useful lives by asset category are as follows:

Buildings 10-35 years
Infrastructure improvements 5-30 years
Machinery and equipment 5-15 years
Furniture and fixtures 5-15 years

Cost of constructed fixed assets includes net interest expense during the
construction period. No depreciation is provided on construction in
progress until construction is substantially complete and the asset is placed
in service.

When property and equipment are disposed of, the related cost and
accumulated depreciation are removed from the accounts with any gains or
losses on disposition being reflected in current operations. The Authority
capitalizes all capital assets in excess of $5,000. Maintenance and repairs
are expensed as incurred.

H. Deferred Outflows/Inflows of Resources
The statements of net position will sometimes report a separate section for
deferred outflows of resources and/or deferred inflows of resources.
Deferred outflows of resources represent a consumption of net position that
applies to a future period and, therefore, not recognized as an outflow of
resources (expense) until then. Deferred inflows of resources represent an
acquisition of net position that applies to a future period and, therefore, not
recognized as an inflow of resources (revenue) until then.

The Authority has one item that qualify for reporting as deferred
outflows/inflows of resources. This is GASB No. 68 variances from
actuarial assumptions. GASB No. 68 variances can occur due to actuarial
assumptions that differ between the actual plan experience and the original
actuarial assumed rates. Differences can result from, among others, earnings
on investments, changes in assumptions, and other experience gains or
losses. A variance represents a gain or a loss, shown as deferred inflows of
resources or deferred outflows of resources, respectively, in the
accompanying statements of net position. These outflows/inflows are
amortized in accordance with the provisions of GASB No. 68. Additional
items are determined annually based on each subsequent year’s variances
from actuarial assumptions.
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