Schedule of Tangible Capital Assets

A schedule of tangible capital assets is typically prepared in the form of worksheets that list the assets, such as pumps and reservoirs, found  in your water system. The worksheets will identify each item, and may show characteristics such as the quantity, the material,the date installed, and the purchase price. They may also show the depreciated value of the asset. The schedules can be extended to show the condition of each asset, its useful life, and the date on which the asset should be renewed or replaced.

The schedule of assets can be used in long-term financial planning. If you know the current replacement value of an asset, and the date on which it should be replaced, you can work out how much money you will need in the future to replace each asset. You may need to make adjustments to the estimate of future replacement cost by allowing for inflation.

By adding together all the projected replacement costs you build a picture of the future expenditures you will incur to maintain the sustainability of your water system. This in turn indicates the revenues you must earn in order to pay for expenditures. You can then plan the rates and charges you will impose on customers in order to earn these revenues. 

By planning ahead in this way you will be able to work out future charges you will make for water, and share this information with your customers. In this way you will avoid Rate Shock: the problem that occurs when water suppliers must suddenly introduce substantial increases in water charges in order to cover renewal costs.    

For resources to help you prepare Schedules of Assets; follow this link.