TOPIC: Intelligent Transportation Systems
OFFICE: Department of Finance and Administration
QUESTION / ISSUE:
STATE: TN
DATE: 04/02/2012
We would like to get information from other states on how they are reporting, for financial statement purposes,
Intelligent Transportation Systems. These systems may include management centers, cameras,
dynamic message boards, traffic sensors, congestion monitoring stations, 511 information, Incident
Management, fog detection and other safety items. If capitalized, please include asset category(ies).
State
Colorado
Comments
The Colorado Department of Transportation does capitalize its Intelligent Transportation
System assets. The attached email contains a scan of the closing exhibit we use to identify
useful lives for depreciation disclosures.
CDOT ITS
Capitalization Thresholds001.pdf
The scan lists the assets identified as ITS and provides the related depreciation life. CDOT
tells us that they record these assets in the financial statement note category “Depreciable
Infrastructure.” Colorado uses $500,000 for infrastructure capitalization. I do not know how
many or what amount of these assets have met that $500,000 threshold.
Florida
For the most part, FDOT “categorizes” most of the ITSs as either Furniture/Equipment or
Buildings (whichever is appropriate). FDOT tries to attach a property ID number to as much
as possible for insurance reasons. That would be an important point to make to Tennessee.
These items are depreciated.
Some (we believe a small percentage) of the ITSs are included in our infrastructure by our
district offices if it is found on DOT right-of-way. FDOT infrastructure is not depreciated
because we use the modified approach…..meaning that we must maintain infrastructure at a
certain level of condition (refer to the note in the CAFR). Likewise, an important point for
Tennessee.
Idaho
Idaho uses the modified approach for recording infrastructure. The Idaho Transportation
Department capitalizes Intelligent Transportation Systems as part of the infrastructure
assets.
Iowa
Iowa accounts for its infrastructure asset as a “network” with “subsystems.” The entire
network is the asset. This includes the Interstate & Primary road systems which we
categorize as “subsystems.” Any lighting, cabling, rest areas, weigh stations and scales are
part of the subsystem/network. Any equipment items purchased such as the items listed in
the question above are capitalized according to the policies and procedures established by
Iowa DOT. If the item meets the dollar threshold it will be capitalized, if not it is expensed. If
it is part of a project that will be added to the infrastructure, then the item becomes part of the
project and is depreciated accordingly. All is dependent upon which cost centers and object
codes are used to account for the costs.
State
Montana
New Mexico
Comments
Montana Department of Transportation has components of an Intelligent Transportation
System. We capitalize these systems based upon either (1) the capitalization threshold for
software; or (2) the capitalization threshold for equipment; or (3) if the individual software and
hardware do not meet the capitalization thresholds by themselves, but when assembled into
a single unit for its intended use, it is capitalized at the total value. If the majority of
component parts are software, we depreciate as software. If the majority of components are
equipment, then we depreciate as equipment.
1. New Mexico’s Department of Transportation uses “PeopleSoft’s financial system” –
asset module to track all of our capital and non-capital assets. The asset module (subledger) records the asset, retirement of the asset, adjustments, book value and the
depreciation of each asset. When we close each period the information is posted to the
full accrual ledger.
2. If the asset is purchased with state dollars the department must follow NMDOT capital
asset procedures. An asset above $5,000 will be loaded as a capital asset or if the
purchase is between $1,000 and $4,999 it is a non-capital asset. All qualifying assets
are loaded into SHARE’s Capital Asset system within 30 days of the purchase.
a. New Mexico does not require state agencies to record assets below $5,000 but it is
highly recommended that state agencies do. NMDOT tracks all non-capital assets
using the Asset Module within SHARE.
b. NMDOT uses 7 categories to define out capital or non-capital assets (please see
attached spreadsheet – Tab Categories).
ITS assets
4-3-12.xlsx
c. The next level of definition is by classification. We can search by category, then
classification. We can use department numbers to pull everything within each
department. (See attachment Tabs Capital or Non-capital.)
3. NMDOT “ITS” program leases the building they are in.
NMDOT’s “ITS” program is funded both by state and federal dollars.
If an asset is purchased with federal dollars the asset cannot be loaded into NMDOT’s asset
system since we consider it as Construction in Progress (CIP). We currently have a manual
process to deal with all of our CIP. Upon the completion of the project, the asset is then
loaded into SHARE’s asset module. The asset number will have a distinction of “F” to
indicate it was purchased with federal dollars.
Assets not used in the operations of the department but used for public purposes are
considered infrastructure assets and accounted for differently. Most ITS systems may
qualify as infrastructure assets. New Mexico tracks infrastructure assets manually at this
point and we utilize completed project expenditure reports to add to the value of our
infrastructure annually. The original infrastructure value for New Mexico was an estimate
done upon implementation of GASB 34 and we update annually based on the above
methodology.
State
Nevada
Comments
Based on inquiry with our Nevada Department of Transportation, I have the following to offer.
Most of our Intelligent Transportation Systems (ITS) are part of the roadway and classified as
Infrastructure. In Nevada we use the "modified approach" for Infrastructure, under GASB 34.
Therefore, Infrastructure is not depreciated.
Our ITS Command Center is housed in the NDOT Las Vegas office building. Buildings are
capitalized and depreciated over 40 years.
As for information technology equipment, when computers are part of the installation of the
ITS project, they are part of the project cost and coded as part of the Infrastructure.
Then computers, incidental to the employees working on the ITS projects, are capitalized as
equipment and depreciated over 4 years, normally.
Finally, we expense the ongoing operating salaries and operating costs annually.
Texas
The Texas Department of Transportation (TxDOT) applies the modified approach to all
assets within the state road and rail network.
A network is composed of all assets that provide a particular type of service for a
government. A subsystem is composed of all assets that make up a portion or segment of a
network. A network or subsystem may account for dissimilar items. In TxDOT’s case, the
state road and rail network consists of pavements, rail tracks, traffic control devices,
electronic toll collection systems, lighting and signage. Rest area facilities around the state
are considered an ancillary part of the state highway road network.
Thus, we considerer intelligent transportation systems as part of our nondepreciable
infrastructure capital assets. We have employed intelligent transportation systems in several
of our Texas metro areas.
There is also the point of capitalization thresholds and how such would apply to a project to
install an ITS system. Currently we are applying a $500K threshold at the individual project
level for all of our capitalizable projects within the state road/rail network, including those for
the installation of ITS systems. We don't consider these ITS systems to be separable
"equipment" assets any more than we consider the light poles and traffic lights to be
separable assets from the network.
Reference
GASB June 30, 2011, Implementation Guide, Q 7.12.7, 7.12.8, 7.12.9, 7.16.1.
Virginia
Virginia capitalizes the types of assets described in the applicable buildings, equipment or
software category.
Wisconsin
Wisconsin is currently not capitalizing costs of our ITS or traffic operations center. We are
using the modified approach to report infrastructure assets. During initial implementation
discussions, we decided to classify these costs as maintenance/preservation rather than
capital.
Wyoming
WYDOT's Intelligent Transportation Systems (ITS) are reported as infrastructure assets with
the exception of the dispatch consoles in the Traffic Management Center. They are included
in the roadway infrastructure. WYDOT uses the modified approach under GASB 34 so we do
not depreciate these assets. The dispatch consoles were capitalized and are being
depreciated.