Infrastructure

What 2 conditions must exist in order to use the modified approach to record and report infrastructure

1. The government must have an asset management system that 1. Keeps an up to date inventory or eligible infrastructure assets. 2. Performs condition assessments of those eligible infrastructure assets at least every three years, using a consistent measurement scale and 3. Estimate each year the annual amount to maintain and preserve those assets at the condition level established and disclosed by the government. 2. The government must document that the eligible infrastructure assets are being maintained at a level at or above the condition level established and disclosed by the government

What are two methods that might be used to record infrastructure expense from year to year ?

A government may record infrastructure and depreciate as any other fixed assets or may use the "modified" method.

Represents long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets

Infrastructure

Examples of infrastructure:

Roads, bridges, tunnels, drainage systems, water and sewer systems, drains, and lighting systems

What are the disclosure requirements if the modified approach is used ?

Two required supplementary information schedules must be prepared. 1. A schedule that discloses the assessed condition of eligible infrastructure assets. 2. Reports that estimated annual amount to maintain and preserve eligible infrastructure assets compared with the amount actually expended for each or the preceding five fiscal periods

How is the accounting different under the 2 methods of recording infrastructure expense?

Under the "modified method" governments expense amounts that are expended to extend the life of the infrastructure (but not improve it) and then are not required to record depreciation on that infrastructure.