The Why and How of the New Capital Asset Reporting Requirements

New requirements for reporting capital assets associated with the governmental funds of state and local governments are among the most significant changes that will be required by Government Accounting Standards Board (GASB) Statement No. 34. Under Statement No. 34, the historical cost of these assets, including general infrastructure assets (for example, roads and bridges), must be reported in the government-wide Statement of Net Assets. The cost of using those assets—generally depreciation expense—must be reported in the government-wide Statement of Activities. This article explores why the GASB established these requirements and how it worked with preparers and others to make meeting these requirements less costly.