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Statement of Activities-Expenses
•Expenses are reported by function
•Direct expenses--required
•Indirect expense allocation permitted
–Separate column for indirect expenses, if allocated
•Depreciation
•Interest
Expenses must be reported at least as detailed as presented in the fund statements.
Indirect expenses can be allocated to functional expenses in a separate column prior to netting revenues against the expenses.
Indirect cost allocations should mirror A-87 cost allocation.
Depreciation expenses is a functional expense when the asset being depreciated can be specifically identified with a function.
Depreciation for shared assets should be allocated to the applicable functions.
Depreciation for items that serve all functions, such as city hall, should be included as either a separate line item or as part of general government.
Infrastructure deprecation should not be allocated to functional expenditures.  It should be reported in the function normally associated with capital outlays for the respective infrastructure.
Interest expense  generally should be reported as a separate line item and not allocated to the functions unless borrowing is essential to the creation or continued existence of a program and it would be misleading to exclude.