TOPIC: Infrastructure Reporting Survey
OFFICE: Department of Transportation
QUESTION / ISSUE:
STATE: TX
DATE: 01/07/2014
Infrastructure Reporting Survey
We are conducting research into the use of the modified approach for infrastructure comprising our state highway
system (state owned/managed roadways). Currently, the state of Texas follows a hybrid approach whereby our
highway roadways are accounted for under the modified approach while our highway bridges are accounted for
under the depreciation approach (with a $500,000 capitalization threshold). We are evaluating changing to a
consistent approach for our state highway roads and bridges.
In addition, we are curious to compare with other states on the methodologies used to determine when
infrastructure is reclassified from construction in progress (CIP) to infrastructure, whether bridges are accounted
for or valued separately and how bridges are valued at other states. In Texas, we are attempting to link up with
information in our contract management system to derive a date that projects are completed and thus should be
moved out of CIP. For bridge costs we have had to develop estimation processes based on initial budgets
because bridge contracts are not separately awarded/costs are not separated out between roads and bridges
once a project begins. This process is getting more complex as we increasingly are creating major infrastructure
through design/build arrangements and service concession contracts where we have no initial design-based
budget by bridge information.
Your participation/response to this survey is much appreciated. Please coordinate with your state DOT as
necessary to answer the survey questions.
State
What approach is
your state currently
following for
infrastructure
comprising the
state’s highway
system?
a. Depreciation
approach
b. Modified
Approach
c. Combination –
please explain
Has your state followed
the same methodology
for infrastructure since
the implementation of
GASB 34?
a. Yes
b. No – Please
explain by describing
reasons for changing
and timing of change.
Please also provide
copy of or link to any
financial report
disclosures that were
made to detail the
change if available.
Does your state account for bridges as a
separate category within infrastructure?
a. Yes – Please explain how your state
estimates/obtains the cost basis of
bridges.
b. No – What procedure is followed when
a portion of the infrastructure is
destroyed or deleted (such as the
destruction of a bridge)?
How does your state determine when to
move construction in progress (CIP)
related to state highway infrastructure into
the infrastructure asset
category/categories?
Alaska
Depreciation
approach
Yes
Yes – See answer for capitalization
threshold. In the event that a project
contains both bridge and adjacent road
expenditures, we determine through the
project description which likely benefitted
more and throw the full carrying value of the
project into that asset class. Infrastructure is
capitalized by project rather than actual
stretch of road.
Highway projects are required to have a
final inspection once the project is
substantially finished. We use the date of
inspection as the date that the
infrastructure is moved out of CIP and
depreciation begins.
Arizona
Modified approach
Yes
Yes, bridges are a separate category. For
bridges that were in service prior to GASB
34, I wasn’t here at the time, but it is my
understanding that there was some
calculation based on the deck area for each
bridge multiplied by some average cost per
square foot, said cost having some inflation
factor applied based on when the bridge
was built. For those placed in service more
recently, these are based on the cost of the
project on which they are built, multiplied by
the bridges’ allocated percentage per the
projects’ IPDT record. These projects are
calculated from contract estimates I receive
for the project from Contracts and Specs.
Projects are placed in service when I
receive either: (1) a copy of the
acceptance letter sent to the contractor by
the district engineer, or (2) the contract
closeout memo issued by contracts
payable. In addition, I do an annual
analysis of projects not-in-service. Those
projects with no cost activity in the last
three complete fiscal years are placed in
service—assuming, of course, that the
projects are more than three years old.
Arkansas
Depreciation
approach
Yes
Yes – Cost assigned to a bridge is based
on contracted amounts and actual
payments.
When the construction engineer “accepts”
the job as completed and the road is
“open to traffic,” the construction in
progress is moved into an infrastructure
asset category.
Colorado
Colorado follows a
depreciation
approach.
No. Both roads and
bridges were initially on
the modified approach.
The state was not able
to maintain a sufficient
condition assessment
and the bridges went
off the modified
approach in FY 200708 and the roads in FY
2009-10.
Not in external reporting; however, we have
balance sheet accounts segregating roads
from bridges (see below), and the
Department of Transportation has an
external financial system (SAP), in which
construction activity is managed by project.
Under GASB 42, when there is significant
physical damage to an asset, it is
recommended that the impairment be
measured using the restoration cost
approach. The cost to restore the asset is
identified in the Department of
Transportation’s SAP system in a project
code, and the project code also identifies
the portion of the historical cost of the asset
that should be written down.
CIP is accumulated in projects in the
Department of Transportation’s external
SAP system. The Project Builder t-code
in SAP contains all of the information
related to a particular project. The Project
Acceptance Date, which is based on
when the project is ready to be put into
service and the contractor has been
notified that the project has been
accepted, is the trigger to capitalize and
begin depreciation.
Florida
Modified approach
Yes
No - for the most part, infrastructure that is
destroyed is usually replaced. Using the
modified approach, replaced infrastructure
is expensed and only the new capacity is
captured as new infrastructure and
capitalized. For the infrastructure that is
removed, we have different methodologies
for valuing the asset. For instance, roads
removed are valued by centerline mile and
depend on whether they are urban or rural,
divided or undivided. Bridges are removed
using a rate per square foot.
FDOT infrastructure project information is
stored in several databases. We extract
data at year-end from these databases
based on status codes that indicate
whether a project is complete. Those
indicated as complete are moved into
infrastructure as part of our year-end
financial processes.
Idaho
Combination –
Bridges follow
depreciation
approach,
roadways follow
modified approach.
Yes
Yes – If a project contains both a bridge
and roadway construction (excluding bridge
approach), we request the project engineer
specify the percentage of the project that is
bridge vs. roadway and we allocate costs
accordingly.
The contraction completion date is the
date we use to determine the in-service
date for a project. The contract
completion date is the date that a letter is
sent from ITD to the contractor informing
the contractor that all stipulations of the
contract have been fulfilled and accepted.
Our project accounting team enters the
contract completion date into our ERP
system, allowing us to run a report
containing the project identifier and the
completion date. Additional costs are
incurred after the contract completion
date, and if material, the asset value is
increased after in-service and recorded as
a prior year adjustment.
Indiana
Modified approach
Yes
Yes, INDOT inventories bridges separately.
A bridge is defined as any structure greater
than 20 feet in length and each such
structure is given a bridge inventory
number.
Indiana moves costs from Work in
Progress to Infrastructure once INDOT
has made formal acceptance of the
roadway or bridge from the contractor.
This is determined by the date that liability
for the roadway/bridge is returned to
INDOT by the contractor who assumed
liability during the construction period.
See Section # 8:
Capital Asset Policy July 2009 - Final.pdf
Iowa
Iowa uses the
depreciation
approach for
infrastructure.
Yes
No, the CAFR only reports “infrastructure.”
The Iowa DOT reports infrastructure as a
“network” with a “Primary Road” subsystem
and an “Interstate” subsystem. (The
network includes all infrastructure items on
the network.) In the event a portion of the
infrastructure is destroyed or deleted (such
as the destruction of a bridge), the method
used by the Iowa DOT to calculate the
value destroyed or deleted depends on the
situation. Often an average cost per mile is
figured for the “network” and the cost per
mile is then applied to the miles being
deleted. The Iowa DOT would obtain
information specific to the bridge which was
destroyed and add that cost to the deletion
adjustment.
The Iowa DOT adds capitalizable
“construction” costs into the infrastructure
Primary and Interstate subsystems
annually as costs are incurred.
Construction costs are accumulated by
cost center and are separated from
maintenance costs which are accounted
for in separate cost centers.
Louisiana
Depreciation
approach
No. During fiscal year
2011, LA DOTD
changed from using the
Wooster Method (an
aggregate value
method based upon
capital outlay
expenditures for a
fiscal year) to a
segment (unit) based
accounting
methodology. The LA
DOTD was upgrading
its information systems
to an ERP system and
would be able to better
track infrastructure
costs.
Yes, LA DOTD accounts for bridges
separately. Since LA DOTD uses the
segment (unit) based approach, segments
of a highway and bridge are initially set up
as separate projects. All construction costs
are coded to the project and are easily
obtained through the ERP system once the
bridge is completed in order to capitalize
the bridge asset. If the bridge is destroyed,
then LA DOTD can easily remove the
bridge and associated depreciation from its
infrastructure assets.
LA DOTD moves construction in progress
related to state highway infrastructure into
the infrastructure asset category when all
work has been completed on the project
and a final acceptance letter is received
from the project manager and approved
by the chief engineer. A Final
Acceptance Letter affirms that all
contractor and subcontractor jobs with a
project are complete and LA DOTD has
taken responsibility for the asset. The
date of the Final Acceptance Letter is
considered the date of acquisition, also
known as the depreciation calculation
start date.
Minnesota
Modified approach
Montana
Depreciation
method
Nebraska
Modified approach
Nevada
New Mexico
Yes
Yes
As both Infrastructure and CIP are
nondepreciable assets, we report both the
CIP related to infrastructure and
completed projects to infrastructure. In
the past, we did not have a mechanism in
the accounting system to separate
completed from noncompleted projects.
However, we implemented an ERP
system and are currently tracking CIP
projects in the projects module. We are
still reporting both together as
infrastructure.
We currently have our infrastructure
separated out by highway type on Asset
Management; however, all types have the
same depreciation criteria.
Under our new methodology, we are
considering CIP based on project status;
any project with a status of A (active) or C
(closed) are considered CIP. Projects
with a status of F (final), FV (final
voucher), or D (deleted) are considered
finished goods infrastructure.
Yes
Nothing under the modified approach.
When the asset is open for public use.
Modified approach
Yes
No – Nevada does not account for bridges
separately. The procedure we follow when
a bridge is destroyed has to do with
whether it was destroyed to increase
capacity or as maintenance. If the bridge
was destroyed to construct a new, better
bridge, then we would include the cost of
the destruction as part of our project cost of
the new structure and add the cost to our
infrastructure.
Nevada determines when to move
construction in progress related to state
highway infrastructure based on the Final
Voucher.
Depreciation
method
Yes
No, infrastructure would be reduced or
adjusted by the deleted item.
When the CIP is complete and placed in
service.
North Dakota
Depreciation
approach
Yes
No – NDDOT reports infrastructure by lane
mile in the categories of 2-Lane, 4-Lane,
and Interstate. This includes all bridges
within that system. DOT handles a removal
or destruction by disposing of the “lane
mile” from the initial asset of that category
and then adds the new “lane mile” to the
newest asset entry for that category.
Specific identification, job by job.
Oklahoma
Depreciation
approach
Yes
No – See #4 below.
Infrastructure is accounted for using the
Wooster method. The Wooster method
counts all expenditures for the entire fiscal
year related to projects to be capitalized
as a single asset whether or not the
individual projects are complete.
The expenditures will be depreciated
straight line over a 30 year life utilizing the
“half year” convention. No salvage value
is used in the calculation.
Lane miles are taken off each month
based on the Comptroller Division’s
review. To determine the amount of the
deletion, the Comptroller Division divides
the total expenditures since 1916 less
previous deletions and bond payments by
the number of highway lane miles at the
end of the fiscal year in which the deletion
occurred to determine the average cost
per lane mile. Then the average cost per
lane mile is multiplied by the number of
lane miles removed from the system
during the current fiscal year. The
amount deleted from accumulated
depreciation is determined by calculating
the midpoint of the expenditures from
1916 to the current fiscal year and
assuming the midpoint is the average
date of service for all projects.
Ohio
Modified approach
Yes
i.
The State of Ohio inventoried all
bridges at the inception of GASB 34 reporting
requirements at the Historical Cost measure.
ii.
From the State of Ohio GASB 34
Implementation Policy: “Beginning with the
fiscal year ended June 30, 2002, the state
reported these infrastructure assets
retrospectively, since ODOT was capable of
providing estimated historical costs for its
infrastructure assets by that time. The state
opted to report the estimated historical costs
of all of ODOT’s infrastructure assets in
existence at June 30, 2001, regardless of
date of construction or last major renovation,
and without attempting to apply a dollar
threshold to individual assets.”
ODOT maintains an inventory of all bridges
that includes the deck area of each bridge and
the year placed into service, but does not
include the cost of the bridge. For the bridges
built from 1986 to 1999, ODOT calculated the
actual cost by square foot of deck area,
exclusive of design costs, for bridges built in
each of these years. The costs for each of
these years were then indexed to 1999 using
the consumer price index, and divided by the
total square feet of deck area of all bridges
built during those years to obtain a current
average replacement cost per square foot of
deck area, exclusive of design costs. ODOT
then multiplied the average cost per square
foot of deck area by the total deck area of all
bridges to obtain current estimated
replacement cost, exclusive of design costs.
These costs were then indexed using the
consumer price index based on the
percentage of total deck area that was put into
service in each year. ODOT then derived an
estimate of design costs expressed as a
percentage the construction costs described
above, and applied this percentage to the total
of the costs indexed for each year to obtain
total estimated current replacement cost.
Ohio utilizes a process that focuses on a
specific Key Event code pulled from our
Construction Management System or Site
Manager. This date designates when a
project has been closed, or capitalized
and is ready to be placed into a specific
infrastructure asset category and
removed from CIP.
Pennsylvania
Depreciation
approach
Yes
Yes – Pennsylvania uses “Project
Systems,” a sub-module of SAP.
Tennessee
Modified approach
Yes
Utah
Modified approach
Yes
Yes – for projects identified as bridge
projects, the life-to-date expenditures for
capital construction expenditures (must
result in increased capacity or efficiency of
the system) are reported as bridge
infrastructure. For projects identified as
both bridge and roadway projects, the total
project cost is multiplied by the percentage
of the project determined to be bridge
related. The value of bridges abandoned,
demolished, transferred or otherwise
removed from the system is determined as
follows: estimated replacement cost
multiplied by the Construction Price Index of
the year of the old bridge (estimated
replacement cost is calculated each fiscal
year). There is no minimum or threshold
amount for the capitalization of
infrastructure assets.
Yes – We have a subsystem in place
(PDBS) which records all contractor
payments on projects. Each bridge is
accounted for separately. We include that
cost for each structure over 20 feet and add
as a pro rata all other project costs.
(Oversight, preliminary engineering.)
Vermont
Depreciation
approach
Yes
Yes – Vtrans captures the cost basis for
individual bridges at the project level.
The balance moves from CIP to Asset at
90% completion. PA Department of
Transportation performs this analysis and
codes appropriate “projects” as complete
so balances can be capitalized or
expensed based on dollar threshold of the
project. (See answer to first question in
the table below.)
A combination of departmental inquiries,
fiscal record examination, and
departmental completion notices will be
used to determine when a project has
been completed and traffic is flowing.
We move a project from CIP to the
infrastructure asset category when a
project has achieved "substantial
completion" status. This status is
achieved when all major work is
completed and the roadway is available to
the public with only minor work to be
completed.
We use the acceptance date.
Acceptance Date – Date noted in the
Completion and Acceptance
memorandum on which designated
responsible agency personnel have
accepted the completeness and quality of
all material incorporated in and work
performed to complete the project.
Yes
Yes – Virginia Department of Transportation
(VDOT) accounts for bridges as a separate
category, and this is identified by a structure
type coding field included in the VDOT
accounting system.
VDOT road and bridge construction
projects are considered to last an average
of two years. VDOT CIP contains the two
most recent fiscal years of construction
cost. At the end of the fiscal year, the
oldest of the two CIP years is moved to
capitalized depreciable infrastructure and
the current fiscal year’s construction
expenditures are added to CIP so VDOT
CIP always includes the two most recent
fiscal years of construction expenditures.
Some construction costs are for roads to
be maintained by urban localities. These
expenditures, when removed from CIP,
are not moved into VDOT infrastructure,
and the locality will capitalize. Restorative
maintenance is capitalized in the same
year that it is incurred.
Response 1:
Modified approach
Yes
Yes – the cost basis of bridges is calculated
based on the deck area square footage and
the estimated cost per square foot adjusted
for inflation using the Federal Highway
Administration’s composite index for
federal-aid highway construction.
Actual costs for the master group (master
group is a family of related highway
infrastructure projects; one master group
may have several design groups in it) are
compared to the estimated costs. Once
we reach 80% or higher threshold, the
entire master group is deemed complete
and is transferred from WIP into
“completed.”
Response 2:
Modified approach
Yes
Yes – There is a formula to give each
bridge a value. The formula is the bridge’s
deck area in square feet times a singular
cost/square foot value that DOT developed
(this amount is $92.52) times the HCCI
index number for the year in which the
bridge was constructed.
With few exceptions, if all projects in a
‘master’ group (grouping of related
projects) are at least 80 percent complete
(as indicated by the actual expenditures
compared to the scheduled expenditures),
they are deemed substantially complete
and the master group is moved to
completed status.
Virginia
Depreciation
approach
Wisconsin
WI CAFR
infrastructure RSI.PDF
The following requests are for those states following the depreciation approach for all state highway infrastructures:
State
Please detail what your capitalization
Please describe your asset categories
Please describe your approach or
threshold(s) is/are for infrastructure assets
within infrastructure and how useful life
approaches for depreciation of your
and your methodology in determining the
years were determined.
infrastructure assets.
projects exceeding the threshold(s).
Alaska
All infrastructure assets have a $1,000,000
capitalization threshold. All expenditures for
infrastructure assets are tracked within a
stand-alone project for each asset. Once an
infrastructure asset is ready to be moved
from CIP, land and equipment expenditures
are backed out of the total expenditures and
the remaining amount is the carrying value of
the asset.
Useful life is outlined in the Alaska
Admin Manual.
Infrastructure:
Useful Life (years)
Highways (new)
40
Airfields (new)
40
Improvements to infrastructure
15
Bridges
75
All assets use straight-line, depreciated
a full year in the year put into
infrastructure.
Arkansas
Capitalization threshold is $5,000 and
contracted amounts and actual payments
are used to determine when threshold is
exceeded.
Useful life years are based on those
recommended by the Government
Finance Officers Association.
Life
yrs
25
10
20
30
30
30
10
20
15
20
15
40
20
20
25
10
20
10
20
Description
PREFABRICATED
STRUCTURES
STORAGE TANKS
FENCING, FENCES, AND
GATES
ROADS
BRIDGES
WALKWAYS (sidewalks,
boardwalks, etc)
ROADS, PARK/RECREATION
(All types Surfaces)
SYSTEMS, UTILITY (All types)
PARKING
PORTABLE WATER SYSTEM
WASTEWATER SYSTEM
STORMWATER SYSTEM
ELECTRICAL SYSTEM
NATURAL GAS SYSTEM
IRRIGATIONS SYSTEM
COMMUNICATION SYSTEM
RAILROADS
AIRFIELDS
CAMPING
Depreciation is calculated on a straightline basis.
Colorado
Colorado’s capitalization threshold for
infrastructure is $500,000. Colorado’s
Department of Transportation tracks
construction activity by project in its internal
financial system.
Colorado’s chart of account segregations
for infrastructure can be found at:
http://coloradoc2.prod.acquiasites.com/sites/default/files/Appendix%2
02.pdf on page 472.
Infrastructure assets are depreciated
on a straight-line basis over the useful
life above, which approximates the
actual useful life.
Useful life is based on experience, which
is generally 40 years for roads and 75
years for bridges. More information
about determining useful life, and default
values, can be found at:
http://coloradoc2.prod.acquiasites.com/sites/default/files/Appendix%2
02.pdf page 393.
Indiana
INDOT uses 6 federal functional classes
with the modified approach so useful life
is not a consideration:
NHS Roads
Non NHS Roads
Interstate Roads
NHS Bridges
Non NHS Bridges
Interstate Bridges
State Institution & Property Roads
State Institution & Property Bridges
Iowa
Iowa’s capitalization threshold for
infrastructure is $1,000,000.
The process the Iowa DOT follows in
determining the infrastructure projects
exceeding the $1,000,000 threshold is
detailed in the response to the above
question: “Does your state account for
bridges as a separate category within
infrastructure?” The Primary and Interstate
subsystems each exceed $1 million,
therefore all construction costs accumulated
in the Primary and Interstate cost centers are
added to the infrastructure annually.
Iowa reports infrastructure in total; we do
not have sub-categories of infrastructure
assets within the CAFR. A range of
useful lives of 10-50 years is used for
infrastructure for the state. Iowa DOT
determines useful lives for the individual
assets within the infrastructure category
as follows: 50 years for each layer of
infrastructure costs for both Primary and
Interstate subsystems. (These layers are
added annually; depreciated using the
straightline method.)
Iowa DOT determines depreciation
expense for infrastructure assets
annually as described in the previous
question. Construction costs are
identified each year for the Primary and
Interstate subsystems. A separate
ledger sheet is maintained for the two
subsystems. Depreciation is calculated
each year for the separate layers of
construction costs and accumulated
depreciation is accounted for in each
layer of costs for each subsystem.
Louisiana
LA DOTD capitalizes all infrastructure assets
without a set dollar threshold.
LA DOTD has 4 asset categories. These
categories are roads, bridges, right-ofway (ROW), and assets under
construction (AuC). Roads and bridges
are depreciated over 40 years without
salvage, while ROW and AuC are not
depreciated. The useful life years are
determined by the LA Office of Statewide
Reporting and Accounting (OSRAP).
LA DOTD follows the state’s
depreciation policy as set by OSRAP:
• Right-of-Way and Assets under
Construction are not depreciated.
• The useful life of all highway and
bridge asset classes for the state of
Louisiana is set at 40 years, including
donated roads and bridges.
• The straight-line depreciation method
will be used for depreciation of all
depreciable capital assets.
• A full year of depreciation will be
taken in the year the asset is placed in
service, regardless of the actual date
the asset was placed in service.
• In the year of disposal, any remaining
depreciation is taken if the asset is not
fully depreciated.
New Mexico
New Mexico - $5,000 capitalization threshold
per state statute, based on actual cost.
New Mexico – Single asset category
titled “infrastructure,” 25 to 30 year life,
how useful life was determined is
unknown.
New Mexico - Allocates the cost of the
infrastructure assets over their useful
lives as depreciation expense.
North Dakota
$100,000. Contract value for specific jobs.
1. OMB reports only one category –
“Infrastructure.” DOT reports completed
infrastructure assets in the categories of
2-Lane, 4-Lane, and Interstate.
Straight line depreciation.
2. State agencies work with their
engineers to estimate useful life, OMB’s
guidance recommends 10 – 50 years.
Pennsylvania
Highway & Bridge = $100,000. Other
Infrastructure = $25,000. Project balances
are tracked in “Project Systems,” a sub
module of SAP.
Highway = 25yrs; Bridge = 50yrs; Dams,
Dikes and Piers = 50yrs; Other = 20yrs.
Useful lives were determined in
coordination with the transportation
department’s engineers and historical
data.
The full accrual approach is used in
accordance with GASB34. One
difficulty Pennsylvania has encountered
is identifying and retiring old highway
and bridge assets that are being
replace/refurbished. We have made
progress in this area over the past
several years but there is a lot of
coordination required to ensure assets
are properly retired when no longer in
use.
Vermont
The threshold is $50,000 for all infrastructure
assets. Projects are set-up as with a CIP
designation in the financial system if it is
anticipated the cost will exceed the
threshold. This is determined by the project
manager.
Useful life is
determined by the
project manager
(an engineer) on
an asset by asset
basis.
Virginia
$100,000. VDOT capitalizes at a $100,000
threshold and considers all construction
projects to be at least $100,000 in value and
capitalizes all construction costs.
Roads are depreciated over 30 years
and bridges are depreciated over 75
years. The useful life of the roads and
bridges was determined by the Chief of
Engineering.
Vermont uses straight line depreciation.
Straight-line depreciation.