Ontario town hit hard by new fixed asset accounting requirements
June 21, 2012
The town of Huntsville, Ontario, will be posting a $4.8 million deficit for 2011, thanks to new accounting requirements pertaining to capital asset depreciation
, Cottage Country Now reports.
"You're going to have to put it in the context of the new accounting principles we have to report by," said Huntsville Mayor Claude Doughty, as quoted by the media outlet. Doughty pointed out that the town's operational budget is approaching the break-even point when amortization is excluded.
"Cash-wise we're doing well, but like every municipality in Ontario, we're not investing enough in our capital (reserves)," added the town's chief administrative officer, Kelly Pender, at a recent council meeting. "To make that $4.8 million go away, we'd have to be spending that much more on capital."
As the news source explains, the province's new fixed asset accounting standards require amortization to be included in order to fund the replacement of capital assets - including roads and buildings - when they reach the end of their useful lives.Fixed asset management
can be tricky, but Sage Fixed Asset
Government Solutions can help municipalities keep things in order.