Fiscal Manager Track · Module FM6

Module FM6: What You Should Know Before Moving On

The whole module in one paragraph General capital assets belong to governmental activities and only appear at the government-wide level. They move through a full lifecycle: acquired at cost, depreciated over time (except land), sometimes impaired by an unexpected event, and eventually disposed of. Capital Projects Funds track construction spending temporarily, closing when the project’s done, while the government-wide level builds the asset up as Construction in Progress. Capitalization thresholds and the GASB 87 lease test are real judgment calls, not just lookups.

Ten topics, ten takeaways

1. What counts as a general capital asset
Governmental activities only, tracked at the government-wide level, not by the fund itself.
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2. Acquiring a capital asset
Recorded at cost, including delivery and installation, at the government-wide level.
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3. Depreciating a capital asset
Spread systematically over useful life, with land as the one major exception.
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4. Impairment
A significant, unexpected decline in service utility, different from ordinary wear.
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5. Disposing of a capital asset
Removed from the books entirely, with any gain or loss recognized at that point.
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6. Capital projects funds
Temporary, project-specific, closing when the construction is done.
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7. Recording a capital project
Expenditures at the fund level, Construction in Progress building up at the government-wide level.
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8. Case: capital assets and leases in practice
A real note, worked through, land’s missing depreciation line as the tell.
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9. Capitalization thresholds
A real policy judgment call, not a fixed rule, with federal grant limits sometimes overriding it.
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10. The GASB 87 lease test
Identified asset, control, and term length decide whether a lease gets capitalized.
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Why this order Topics 1 through 5 build the full asset lifecycle, one stage at a time. Topics 6 and 7 shift to how new assets get built and recorded in the first place. Topic 8 grounds all of it in a real case. Topics 9 and 10 layer in the two decisions that determine whether something even counts as an asset at all. Module FM7 assumes all ten, especially topic 6’s fund structure, since debt often finances the projects covered there.

Check your understanding

Before moving to FM7, take the FM6 checkpoint quiz.

Take the FM6 checkpoint quiz →