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Choice 1
What is infrastructure?
Infrastructure represents long-lived capital assets that are stationary in nature and
normally can be preserved for a significantly greater number of years than most
capital assets. This explanation is according to GASB statement 34.
What are the two methods ian entity may use to record infrastructure expense?
1. The modified Method : expense amounts are amounts that expend to extend
the life of the infrastructure; and are not required to record depreciation on that
infrastructure.
2. accounting method is normal accounting method in which the government may
record the infrastructure and depreciated as any other fixed asset over its useful
life.
What conditions must exist to use the modified approach to record and report
infrastructure?
Strict conditions must be implemented and governed by an established level of
government. In using the modified approach the government must have an asset
management system back has up to date inventory infrastructure and performs
condition assessments of those eligible infrastructure assets at least every three
years using a consistent and measurable scale and must estimate each year the
annual amounts in which to maintain and preserve those assets under the
conditions at or above the level established by the government.
4. What disclosure requirements are necessary if the modified approach is used by
entity?
In order to use a modified approach to a supplementary information schedules are
required and must be prepared.
1. One type of schedule must disclose the conditions assessed of that eligible
infrastructure assets.
2. A report must follow containing an estimated annual amount in which preserves
the eligible asset and then compared with the actual amount incurred for each of
the preceding five fiscal periods.
Choice 2
List and discuss the four categories of cash flows use and GASB standards. Include
an example of each item which would be included in each category.