Capital assets are often the largest single dollar value (outside of totals) on governments’ statements of net position, but for such giant-sized amounts, they seem to get relatively little attention from accountants. Based on the prevalence of fully depreciated assets still in service, it seems that many governments capitalize costs, establish standardized useful lives and depreciation/amortization methods (and when’s the last time you heard of a government using anything other than the straight-line depreciation method?), and then report capital assets on autopilot. Rarely do we see governments reassess the useful lives of individual capital assets (more on this later). This “set it and forget it” approach leaves more time to deal with the annual trials of measuring investments, postemployment benefit, claims and judgements, and leases, just to name a few. Let’s face it, accounting and financial reporting for capital assets can seem boring, correct?
Well…maybe it’s not so boring
- Publication date: December 2024
- Author: Michele Mark Levine