Capital Assets

Capital assets are those owned by governments such as buildings, equipment, vehicles, and infrastructure. Capital assets can be purchased with cash, a loan, or a lease. These assets are placed on depreciation schedules and are amortized over their economic lives. Some capital assets, such as land, are not depreciable. Other assets have economic lives (years of expected life) that are assigned to them. 

Capital assets usually make up the largest portion of a government’s assets, but, obviously, they are not spendable like cash. So a portion of equity is assigned to investments in capital assets.