Comprehensive Annual Financial Report - Metro Transit

Bi-State Development Agency of theMissouri-Illinois Metropolitan DistrictNotes to Financial StatementsJune 30, 2011 and 2010Capital AssetsCapital assets, which include property, plant, equipment, and infrastructure assets, arerecorded at cost, when acquired or constructed. Capital assets are defined by Metro asassets with an initial, individual cost of more than $5,000 and an estimated useful life of 3years or more. Improvements to existing plant and equipment, which extend the usefullives of the related assets, are capitalized. Donated capital assets are recorded at theirfair value at the time of donation. Expenditures for maintenance and repairs are chargedto expense as incurred. When capital assets are retired or otherwise disposed of, thecost of the assets and the related accumulated depreciation are removed from theaccounts and gains and losses on disposals are recorded. Prorated shares of theproceeds from the sale of property and equipment, which were acquired with federal orstate funds, are returned to the United States Department of Transportation – FederalTransit Administration or the related state Department of Transportation, respectively.Depreciation and AmortizationDepreciation of capital assets is calculated using the straight-line method over theestimated useful lives of the assets. The estimated useful lives are as follows:YearsAirport runways and related facilities 15-25Buildings and improvements 15-25Gateway Arch tram facilities15-25Riverboats and barges15-20Light rail structures and improvements 12-30Autos and trucks5-10Buses, vans, light rail and other revenue vehicles 3-25Furniture, fixtures, computers and other equipment 3-10Self-insurance LiabilityLiabilities for workers' compensation, employee medical and dental insurance claims, andpublic liability and property damage claims are recognized as incurred on the basis of theestimated cost to Metro upon resolution.Workers’ compensation benefits are awarded as appropriately determined bygovernmental authority in each state in which Metro operates. Estimated liabilities forinjury and damage claims and medical and dental insurance claims are charged tooperations in the year the claim events occur; estimated liabilities for outstanding claimsare made by management.Self-insured liabilities are reported when it is probable that a loss has occurred and theamount of the loss can be reasonably estimated. Liabilities include an amount for claimsthat have been incurred, but not reported.21