What do Capital Assets include?

Capital assets encompass long-term resources or assets that a municipality or organization uses in the production of goods and services. These typically include significant items such as buildings, land, equipment, infrastructure, and improvements that have an expected useful life extending beyond a single reporting period. They represent a substantial investment and are essential for the ongoing operations and services provided to the community.

The focus on long-term assets is crucial because they are not easily converted to cash and are not intended for immediate consumption in the regular course of business. Instead, they underscore the financial health and operational capacity of a municipality, as their management affects long-term budgeting and financial planning.

Understanding capital assets is vital for municipalities as they often require careful tracking and management due to their significant financial implications, including depreciation and funding for maintenance or upgrades.