Individual Capital Asset Records and the Capital Asset Accounting System

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Individual Capital Asset Records and the Capital Asset Accounting System

Reference Number: MTAS-634
Reviewed Date: 09/08/2026

Municipalities should maintain their capital asset accounting system (CAAS) electronically. Many accounting software systems contain a capital asset module for this purpose. If the municipality's software does not have this capability, the required information can be maintained in a spreadsheet.

The CAAS is the capital asset subsidiary ledger. The total amounts recorded in the CAAS should agree with the capital asset amounts reported in the general ledger and financial statements

The following information should be documented for each individual asset:

  • Asset number and asset class;
  • Date of acquisition;
  • Vendor;
  • Description;
  • Department and location;
  • Cost;
  • Fund used for the purchase;
  • Method of acquisition;
  • Estimated useful life;
  • Disposition date, method, and authorization; and
  • Depreciation method, accumulated depreciation and current depreciation expense, when applicable.

Each capital asset should be assigned a unique asset number. A permanent asset number provides a link between the physical asset and the CAAS and helps the municipality track the asset throughout its useful life.

Municipalities should use a consistent numbering system. A simple system may use a numerical sequence with a letter prefix to identify the asset class, such as L for land, B for buildings, I for infrastructure, O for improvements other than buildings, E for equipment, N for intangible assets, and C for construction in progress. The numbering system may also identify the department or other information useful to the municipality.

The CAAS should be reviewed and updated regularly to reflect acquisitions, disposals, transfers, and other changes to capital assets. Municipalities should also periodically compare the CAAS to the physical assets on hand and reconcile the CAAS to the general ledger.