North Dakota Administrative Code › Title 75 - Department of Human Services › Article 75-04 - Developmental Disabilities › Chapter 75-04-05 - Payment for Provider Agencies of Services to Individuals with Intellectual Disabilities - Developmental Disabilities › Section 75-04-05-15 - Depreciation

Current through Supplement No. 393, July, 2024
1. The principles
				of payment for provider agency costs require that payment for services include
				depreciation on depreciable assets that are used to provide allowable services
				to clients. This includes assets that may have been fully or partially
				depreciated on the books of the provider agency, but are in use at the time the
				provider agency enters the program. The useful lives of these assets are
				considered not to have ended and depreciation calculated on the revised
				extended useful life is allowable. Likewise, a depreciation allowance is
				permitted on assets that are used in a normal standby or emergency capacity.
				Depreciation is recognized as an allocation of the cost of an asset over its
				estimated useful life. If any depreciated personal property asset is sold or
				disposed of for an amount different than its undepreciated value, the
				difference represents an incorrect allocation of the cost of the asset to the
				facility and must be included as a gain or loss on the statement of costs. The
				facility shall use the sale price in computing the gain or loss on the
				disposition of assets.
2. Special
				assessments in excess of one thousand dollars paid in a lump sum must be
				capitalized and depreciated. Special assessments not paid in a lump sum may be
				expensed as billed by the taxing authority.
3. Depreciation methods:
a. A provider agency shall use the
				straight-line method of depreciation. All accelerated methods of depreciation,
				including depreciation options made available for income tax purposes, such as
				those offered under the asset depreciation range system, may not be used. A
				provider agency shall apply the method and procedure for computing depreciation
				on a basis consistent from year to year and shall maintain detailed schedules
				of individual assets. If the books of account reflect depreciation different
				than that submitted on the statement of costs, a provider agency shall prepare
				a reconciliation.
b. For all assets
				obtained prior to August 1, 1997, a provider agency shall compute depreciation
				using a useful life of ten years for all items except vehicles, which must be
				depreciated over four years, and buildings, which must be depreciated over
				twenty-five years or more. For assets other than vehicles and buildings
				obtained after August 1, 1997, a provider agency may use the depreciation
				guidelines , to determine the useful life or the composite useful life of ten
				years. For all assets, other than vehicles and buildings, obtained prior to
				April 1, 2018, a provider agency's prior depreciation schedule must be used. A
				provider agency shall use a useful life of ten years for all equipment not
				identified in the depreciation guidelines.
c. A provider agency acquiring assets as an
				ongoing operation shall use as a basis for determining depreciation:
(1) The estimated remaining life, as
				determined by a qualified appraiser, for land improvements, buildings, and
				fixed equipment; and
(2)
(a) A composite remaining useful life for
				movable equipment, determined from the seller's records; or
(b) The remaining useful life for movable
				equipment, determined from the seller's records.