City and County of Denver Municipal Airport System ANNUAL ...

City and County of Denver
Municipal Airport System
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
economic resources measurement focus and the accrual basis of accounting (see note 22 for the description of
the impact of this standard.)
(b)
(c)
(d)
(e)
Cash and Cash Equivalents
Cash and cash equivalents, which the City manages, consist principally of U.S. Treasury securities, U.S. agency
securities, and commercial paper with original maturities of less than 90 days.
Investments
Inventories
Investments, which the City manages, are reported at fair value, which is primarily determined based on quoted
market prices at December 31, 2010 and 2009. The Airport System’s investments are maintained in pools at the
City and include U.S. Treasury securities, U.S. Agency securities, and commercial paper.
Inventories consist of materials and supplies which have been valued at the lower of cost (weighted average
cost method) or market.
Capital Assets
Capital assets are recorded at historical cost and consist of buildings, roadways, airfield improvements,
machinery and equipment, land, and land rights at Denver International. Donated capital assets are reported at
their estimated fair value at the time of acquisition plus ancillary charges, if any. Repairs and maintenance are
charged to operations as incurred, unless they have the effect of improving and extending the life of an asset, in
which case they are capitalized as part of the cost of the asset. Costs associated with ongoing construction
activities of Denver International are included in construction in progress. Interest incurred during the
construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the
invested proceeds over the same period. The capitalized interest incurred for 2010 and 2009 was $3,370,616
and $2,035,448, respectively.
Depreciation is recorded using the straight-line method over the following estimated useful lives:
Buildings
Roadways
Runways/taxiways
Other improvements
Major system equipment
Vehicles and other equipment
20 – 40 years
30 – 40 years
35 – 40 years
15 – 40 years
15 – 25 years
5 – 10 years
(f)
Bond Issue Costs, Deferred Losses on Bond Refundings, and Unamortized Premiums (Discounts)
Bond issue costs, deferred losses on bond refundings, and unamortized premiums (discounts) are deferred and
amortized over the life of the old bonds, or the remaining life of the refunding bonds, whichever is shorter,
using the effective interest rate method. Bond issue costs are recorded as deferred charges. Unamortized
premiums on bond refundings are recorded as an addition to the face amount of the bonds payable. Unamortized
discounts and deferred losses on bond refundings are recorded as a reduction of the face amount of the bonds
payable.
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