Conversion adjustments: Fixed Assets
1. Beginning of the year capital assets of governmental funds (net of accumulated depreciation) are added to the governmental activities.
2. The balance in “Capital expenditures” is eliminated and replaced with fixed assets acquired during the year - treat as asset instead of expenditure.
3. Depreciation for the current period is recorded.
4. The balance in “Proceeds from sale of fixed assets” is eliminated, assets and depreciation are removed, and gain and loss are recorded.