GASB Asks For Input on Infrastructure Assets Proposals

Several Governmental Accounting Standards Board (GASB) proposals regarding the accounting and financial reporting for infrastructure assets are on the table for stakeholders to review and provide feedback.

The GASB issued a preliminary views document Oct. 10 on the infrastructure assets project, which the standard-setting board said is in its “relatively early stage.”

The objective of the project is to re-examine issues associated with accounting and financial reporting for infrastructure assets and consider improvements to existing guidance, according to the GASB. These improvements relate to recognition and measurement, note disclosures, and required supplementary information.

Pre-agenda research showed that financial statement users want better information about the condition of infrastructure assets and how the government is maintaining those assets than what is currently available in financial statements.

The preliminary views document presents the board’s current thinking on how to provide users with that information, the GASB said.

Under the board’s preliminary views, infrastructure assets would be defined as “individual assets that may consist of multiple components that are part of a network of long-lived capital assets that are utilized to provide a particular type of public service, that are stationary in nature, and that can be maintained or preserved for a significant number of years.” Typical examples include roads, bridges, and tunnels, the GASB said.

The preliminary views proposes to carry forward existing recognition and measurement requirements for infrastructure assets that allow for governments to measure infrastructure using historical cost net of accumulated depreciation unless the government elects to use the modified approach. The proposal also says that governments reporting infrastructure assets measured at historical cost net of accumulated depreciation periodically review estimated useful lives and salvage value. In addition, the proposal says that governments separately depreciate each component of an infrastructure asset that is significant to the total cost of the asset if the useful lives of these components are different.

Governments electing to report infrastructure assets using the modified approach should have processes in place to document that the condition of the assets is being preserved at a level established by the government, the document states.

The GASB is also proposing to remove some of the existing note disclosures related to infrastructure assets and to add four new note disclosures, including a disclosure of maintenance or preservation expenses and another disclosure of assets reported using historical cost net of accumulated depreciation that have exceeded 80% of their estimated useful lives. A related schedule of maintenance expenses over the past 10 fiscal years is also proposed to be included in required supplementary information, according to the GASB.

Stakeholders are asked to review and provide feedback on the preliminary views document by Jan. 17, 2025. Comments may be submitted either through a comment letter or an electronic input form.

Also, a series of public hearings and user forums on the infrastructure assets project has been scheduled, with additional information available in the document.