Facts: When GASB Statement No. 34, Basic Financial Statements, was issued, it became one of...
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Facts: When GASB Statement No. 34, Basic Financial Statements, was issued, it became one of the most critical governmental accounting standards available, covering a wide range of issues on government financial statement preparation. One of the biggest issues that state and local governments faced, in adopting this guidance, was the requirement that infrastructure (such as roads, bridges, sewer systems, and rail lines) be capitalized. This standard has since been codified in the GASB Codification; therefore, any references you make to the authoritative literature should refer to the updated GASB Codification.
Required: Act as though you are a local government accountant and write a brief issues memo to your accounting supervisor explaining the requirement from the GASB Codification that requires infrastructure to be capitalized, and explain the options available for subsequently measuring infrastructure. Emphasize that the town must select between these two options, and include your recommendation. Cite from authoritative literature as support for any conclusions.
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