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EXHIBIT 3 <br /> 28 HB Fiscal Polices Et Procedures <br /> Capitalization of Expenditures <br /> HB considers capital expenditures to be the following: expenditures that increase the value of <br /> property, extend its life, or alter it to a new or different use. HB also capitalizes significant <br /> improvements to property leased by HB, including improvements that add value to the leasehold. <br /> Basis for Cost <br /> The accounting records show the depreciable assets at the acquisition cost. Acquisition costs <br /> include the invoice price plus all expenses incurred to prepare the asset for operation, including <br /> such costs as preliminary engineering studies and surveys, legal fees to establish title, installation <br /> costs, freight, and labor and material used in construction or installation. <br /> Non-depreciable capital assets (e.g., [and) are carried in the records at the original net cost. <br /> Determination of Useful Life <br /> When HB acquires an asset, the Director of Finance estimates its useful life using such indicators <br /> as terms of time, units of production, or hours of service. The cost of an asset is determined over <br /> its useful life via depreciation or depletion. When an asset has an indeterminable useful life, such <br /> as that for land, HB does not depreciate it. <br /> In the event of a significant change in the estimate of the remaining useful life after the asset has <br /> been placed into use, HB will distribute the remaining cost to be depreciated over the revised <br /> remaining life. <br /> Fully Depreciated Assets <br /> Fully depreciated assets remain in the fixed asset ledger with the related accumulated <br /> depreciation as long as the property is still in use to ensure accurate tracking and safeguarding of <br /> assets. <br /> Asset tagging for government-funded organization <br /> When HB uses government contract funds to acquire assets, these cannot be treated as fixed <br /> assets belonging to the organization. Staff should identify and tag such assets appropriately and <br /> keep them available for inspection in case of an audit. <br /> D. References <br /> Asset Disposal Form Used to track and obtain approval for the disposal of capital assets. <br /> E. Procedures <br /> PROCESS7.1 ASSET ACQUISITION <br /> 1. Obtain capital asset according to the purchasing X <br /> guidelines in Section 3. <br /> 2. Upon receipt of capital asset, label item with X <br /> organization name and identifying number. <br /> 3. Assign the asset an estimated useful life. X <br /> Last updated September 2022 <br />