M E M O R A N D U M

 

TO:

Agency GAAP Contact Persons

FROM:

Central State Financial Reporting Division

DATE:

AprilMayJune XX14, 2001

SUBJECT:

GASB 34—-Infrastructure Reporting Infrastructure PoliciesInformation

 

The Comptroller General’s Office has decided that the State of South Carolina’s primary government willthe majority of  report only the Department of Transportation’s roads and bridges (and roads and bridges, if any, of the State Infrastructure Bank) as “infrastructure” in the State’s financial statementsowned .  All othere may be ther State agencies that that own have assets that might otherwise appear to be infrastructure assets should report those assets as “depreciable land improvements” or “buildings and improvements” if their cost exceeds the applicable capitalization limit of $100,000.  Depreciable land improvements, buildings, and building improvements currently on the capital assets ledger that cost $100,000 or less must be removed upon implementation of GASB 34.  This change in policy should be reported retroactively as a change in principle (i.e., as adjustments to the beginning balances of capital assets).

The following list is not all-inclusive but provides examples of assets that State agencies other than the Department of Transportation should report in the “depreciable land improvements” or the “buildings and improvements” categories of capital assets:

Access roads                                                               Power lines/electrical systems

Drainage systems                                   Fiber optic cable networks

Water and sewer systems          Fencing

Lighting systems                                   Parking lots


Agencies should choose the “buildings and improvements” category if the asset is associated with a particular building or group of buildings andbut should use the “depreciable land improvements” category if the asset would continue to retain its usefulness without the presence of any existing building.

Communication systems, including microwave towers, should continue to be reported in the “buildings and improvements” or “equipment” category.  Specifically, equipment that becomes a permanent fixture of a building and is not easily separable from the building should be recorded in “buildings and improvements”; otherwise, it should be reportcorded in “equipment.”

In order tTo calculate depreciation on these assets, agencies need to assign a useful life based on the schedule provided in the policy memo on capital assets issued to agencies on February 13, 2001.  If the specific type of asset is not listed, please choose a useful life that does not exceed the maximum provided on the schedule of 60 years for land improvements or 55 years for building improvements.  Agencies should calculate depreciation using the method described in the above-referenced memo.

QUESTIONS?

Please contact Betsy Lawson by telephone at (803) 734-2617 or by e‑mail at blawson@cg.state.sc.us  if you have any questions regarding the information contained in this memo.  Thank you.

BCH:bg

 

 

 

2001-04-28