What is Modified approach (infrastructure)?
In short
The modified approach lets a government skip depreciating eligible infrastructure assets, such as roads and bridges, if it manages them with an asset management system and documents that they are preserved at or above a condition level it has set.
Key takeaways
- Spending to preserve the assets is expensed; additions and improvements are capitalized.
- Condition assessments are reported as required supplementary information.
- If the condition falls below the set level, the government must go back to depreciation.
Where it's tested
BAR: Government-Wide Statements & the Annual Comprehensive Financial Report — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Under the modified approach, a government may choose not to depreciate eligible infrastructure assets if it: