I am asked this question often in my consultations and presentations: What is the difference between Capital Assets and Insurance Assets?
One of the most common areas of confusion is asset valuation — particularly when capital asset values are compared to insurance values.
Capital assets are recorded at historical cost and depreciated over time. Historical cost is what you paid to acquire or construct the asset, including certain ancillary costs.
Insurance values, on the other hand, are based on replacement cost — what it would cost to replace that asset today.
So when leadership looks at an insurance schedule and compares it to the capital asset listing and asks, “Why don’t these numbers match?” that’s actually a reasonable question.
The answer is that they’re designed for very different purposes. Insurance values are about risk coverage. Capital asset values under GASB are about financial reporting and historical investment.
If you’ve ever struggled to explain that difference in a way that makes sense to non-accountants, you are not alone. This is one of the most common conversations we see.
Kim Falco, National Director of Sales, Asset Control Solutions