The modified approach to accounting for infrastructure assets may be utilized
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The Governmental Accounting Standards Board (GASB) allows governments to use the modified approach to account for qualifying networks or subsystems of infrastructure assets. Under the modified approach, infrastructure is treated as an inexhaustible capital asset, thereby eliminating the need for depreciation accounting. Governments must demonstrate that they are maintaining networks or subsystems of infrastructure assets at a selected condition level to qualify to use the modified approach. Governments should consider the factors identified in this primer in the process of deciding whether to use depreciation accounting or the modified approach for a given network or subsystem of infrastructure assets. What is accounting for infrastructure assets?Infrastructure assets are accounted for under capital assets as either non-depreciable, depreciable or both. The approach for reporting infrastructure assets can vary from one government to another, as allowed by accounting standards.
When using the modified approach to account for infrastructures expenditures to extend the life of the infrastructure assets are?1. When using the modified approach to account for infrastructures, expenditures to extend the life of the infrastructure assets are expensed. 1. Governments have the option to capitalize infrastructure assets in the governmental funds' fund-basis financial statements.
Which of the following is necessary for a government to use the modified approach for infrastructure capital assets?Governments must demonstrate that they are maintaining networks or subsystems of infrastructure assets at a selected condition level to qualify to use the modified approach.
What is infrastructure in accounting?Infrastructure is defined as long-lived capital assets that are stationary in nature and normally preserved for a significantly greater number of years than most capital assets. Infrastructure assets are usually part of a larger system of assets, such as roads, bridges, tunnels, water and sewer systems.
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