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City of Louisville <br />Notes to the Financial Statements <br />December 31, 2014 <br />Note 1: Summary of significant accounting policies (continued) <br />D. Assets, liabilities, and net position/fund balance (continued) <br />6. Capital assets (continued) <br />Property, plant, and equipment of the City are depreciated using the straight <br />line method over the following estimated useful lives: <br />Assets Years <br />Buildings 50 <br />Building Improvements 30 <br />Streets & Sidewalks 35 <br />Water, Wastewater, & Storm Water Systems 50 <br />Vehicles 3 — 7 <br />Machinery & Equipment 5 — 10 <br />Computer Equipment 3 — 10 <br />7. Compensated absences <br />Upon termination, employees are paid for all unused time in their paid leave <br />bank and compensatory time bank. Accumulated paid leave and <br />compensatory time for employees paid out of governmental funds are <br />recorded as a fund liability when due. All unused time is recorded as a <br />liability in the governmental activities column in the Statement of Net <br />Position. As the paid leave and compensatory time benefits accrue to <br />employees of proprietary funds, an expense and liability is recorded in those <br />funds. <br />8. Long-term obligations <br />In the government -wide financial statements, and proprietary fund types in <br />the fund financial statements, long-term debt and other long-term obligations <br />are reported as liabilities in the applicable governmental activities, business - <br />type activities, or proprietary fund type statement of net position. <br />In the fund financial statements, governmental fund types recognize bond <br />discounts and issuance costs in the current period. Bond <br />premiums/discounts for proprietary fund types are capitalized and amortized <br />on a straight-line basis over the term of the bonds using the straight-line <br />method, which approximates the effective interest method. Bond <br />premiums/discounts are presented as an increase in or reduction form the <br />face amount of bonds payable. Bond issuance costs are expensed as <br />incurred. <br />9. Deferred Outflows/Inflows of Resources <br />Deferred outflows of resources represent a consumption of net position that <br />applies to a future period(s) and so will not be recognized as an outflow of <br />resources (expense/ expenditure) until then. The City has only one item that <br />qualifies for reporting in this category — the deferred charge on refunding <br />reported in the government -wide statement of net position. A deferred <br />45 <br />