When you are not able to determine the historical cost of capital assets owned by a governmental unit, the following procedure should be followed.
- Develop an inventory of all capital assets which are significant for which records of the historical costs are not available.
- Obtain an estimate of the replacement costs of these assets.
- Through inquiry determine the year or approximate year of acquisition.
- Then multiply the estimated replacement cost by the factor for the year of acquisition from the Table of Cost Indexes – page 4 (Updated each year in bulletin articles). The resulting amount will be the estimated cost of the asset.
The estimated replacement cost in some cases can be obtained from insurance policies.
However, if estimated replacement costs are not available from insurance policies, you should obtain or make an estimate of the replacement costs.