Governments that use the modified approach to report infrastructure assets must capitalize infrastructure assets and depreciate them over their estimated useful lives.

Question

Quizplus · Accepted Answer

Under the modified approach, infrastructure assets need not be depreciated, provided the government has an asset management system and documents that the assets are being preserved at or above a condition level that it establishes and discloses. Under the modified approach, all preservation expenditures are treated as expenses in the year they are incurred. Additions or improvements that increase the capacity or efficiency of the assets (rather than preserve their useful lives) should be capitalized.

Governments That Use the Modified Approach to Report Infrastructure Assets