GASB proposes guidance on infrastructure assets

A new GASB exposure draft, Infrastructure Assets, is intended to improve the financial reporting requirements for infrastructure assets, enhancing the consistency in their application and better meeting the information needs of financial statement users.

GASB, based on feedback from stakeholders, is proposing the guidance related to the definition, recognition, and measurement of infrastructure assets, according to a Wednesday news release, as well as associated note disclosures and required supplementary information schedules.

The comment deadline is June 26.

For infrastructure assets reported at historical cost net of accumulated depreciation, the ED includes proposed guidance related to separately recognizing and depreciating components of those assets.

Specifically, according to the news release, if a component of an infrastructure asset has a cost that is significant in relation to the total cost of the infrastructure asset and the estimated useful life of that component is substantially different from the estimated useful life of the infrastructure asset, that component should be considered a separate infrastructure asset in the determination of depreciation expense, including the determination of the estimated useful life, and for purposes of required disclosures in notes to financial statements.

The proposed guidance in the draft also emphasizes the requirement for governments to perform a periodic review of the estimated useful lives and salvage values used in the calculation of depreciation expense for the infrastructure assets.

— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.