Governmental Accounting - Essay Example

Government Accounting GASB disclosure requirements for capital and infrastructure assets In reference to GASB 34, infrastructure and capital assets need specific and general disclosures respectively (National center for education statistic, 2004). This is essential for making notes to financial statements and during management discussion and analysis of the business’s performance. For capital assets;I. Both beginning and end year assets balances must be disclosed in the note of financial statements to help users in determining changes in the value of capital assets. II. The accumulated depreciation that the capital assets were subjected to during their acquisition should also be disclosed.

However, the accumulated depreciation depends on the method of depreciation being used in preparation of financial statements. III. The notes should also disclose the amount of assets added or sold during a particular financial year (National center for education statistic, 2004). IV. The notes must show annual depreciation charged according to the depreciation method adopted to help in determining the current value of capital assets at the end of the fiscal year.V. The notes must show description of non-capitalized works of art and historical treasures and the reasons why they were not capitalized.

These are collection of capital assets which includes items owned by the government and are held for education, research or public exhibition as part of public service more than for financial gain. GASB classifies capital asset accounts into three broad accounts:i. Invested in fixed (capital) assets, net of related debts- This includes capital assets of the fund, less all capital asset related debts.ii. Unrestricted capital account- This amount includes the difference between the remaining liabilities and assets in the fund as well as reclassified restricted assets when the government meets all restrictions.iii. Restricted capital account- The amount in this account includes the difference between assets externally restricted by the grantors, creditors and donors of other government or internally restricted by constitutional provision and any other liabilities that can be paid from these restricted assets.

For the modified approach, GASB 34 requires various disclosures when accounting for infrastructure assets. Some of these disclosures include;I. Disclosure of the assessed condition of the infrastructure assets at the end of a given fiscal year. II. The estimated annual maintenance cost of the assets at or above the pre-established condition should also be disclosed in the notes. III. The basis for condition measurement and scale used in assessing and reporting the condition of the assets is another item required by GASB 34 to be disclosed. IV. Finally, disclosure of the condition at which infrastructure assets need to be preserved is required.

ReferenceNational center for education statistic. (2004). Financial reports. Washington, DC: Institute of education and science. http://nces.ed.gov/pubs2004/h2r2/ch_5_4.asp