N.M. Admin. Code § 2.20.1.9

Current through Register Vol. 36, No. 1, January 14, 2025

Section 2.20.1.9 - CLASSIFICATION OF FIXED ASSETS

A. The type of service that the asset was purchased for must be used to classify fixed assets. The object code under which it was purchased is usually a reliable indicator of the service for which it was purchased.

B. Object codes from the category for capital outlay may be used. Purchases from other categories may also be capitalized if appropriate. For example, certain types of repairs or maintenance may increase the useful life of the asset. These costs should be added to the cost of the asset.

C. The recommended classifications and definitions are:

(1)"Land": Only real property is included in this category. Costs to be included that are not specifically stated in Subsection B of Section 2.20.1.10 NMAC include fees for appraisals, title searches, attorney's fees, demolition of structures (less any salvage) as part of site preparation, and agent's commissions.

(2)"Land Improvements": Improvements subsequent to the acquisition of land are in this category. Such assets have a limited economic life. Examples are roadways, landscaping, utility infrastructure, and fencing. This category may also be used to record leasehold improvements. Leasehold improvements should be capitalized to recognize the allocation of the cost of the improvements for the duration of their useful lives.

(3)"Buildings and Structures": This category shall be used for all buildings and structures that are permanently fixed to land.

(4)"Furniture and Fixtures": These are assets that are not permanently fixed to land, but are the contents of a building.

(5)"Information Technology Equipment" (including software): This category of equipment includes computers and peripherals, and all equipment related to electronic communications.

(6)"Equipment and Machinery": Equipment that is related to industrial production, construction, land or grounds maintenance, food service, public safety should be recorded in this category.

(7)"Farm Equipment": All equipment related to agricultural or ranch production should be recorded in this category.

(8)"Livestock and Poultry": This category is only used for farm or ranch animals that are not purchased for immediate consumption or production of food.

(9)"Library and Museum Acquisitions": Assets in this category only include holdings of libraries or museum collections. A publication that is available in a library but that is acquired by an agency for its private use would be appropriately categorized as furniture and fixtures. Similarly, a farm museum would use this classification for tractors and ploughs, even if they are used for their intended purpose.

(10)"Motor Vehicles and Aircraft": This category is for all such vehicles that the agency owns. Vehicles and aircraft acquired under the terms of an operating lease should not be recorded as fixed assets.

D. Agencies may use these fixed asset classifications for the purpose of pooling assets for depreciation, for publication in financial statements, or other management objectives.

N.M. Admin. Code § 2.20.1.9

09-30-99; Recompiled 10/01/01, Adopted by New Mexico Register, Volume XXX, Issue 24, December 31, 2019, eff. 12/31/2019