GASB Exposure Draft: Key Updates on Infrastructure Assets

Melisa Galasso from GLS recently broke down the highly anticipated new exposure draft from the Governmental Accounting Standards Board (GASB) focused on infrastructure assets—a major amendment to GASB 34. This move represents the second phase of the ongoing project, building on the groundwork laid by last year’s preliminary review document. Below, we summarize the essential takeaways for finance professionals looking to stay ahead in governmental accounting and reporting.

What’s Covered Under Infrastructure Assets?

The draft defines infrastructure assets as capital assets that are either stationary in nature or part of a network of assets meant to be preserved for many years. Common examples include:

• Roads

• Bridges

• Tunnels

• Communication towers (a new addition reflecting modern infrastructure needs)

A new clarification addresses buildings: if a building serves a primary purpose that is integral, yet only ancillary, to a network of infrastructure assets, it should be classified as an infrastructure asset as well.

Understanding “Network” and “Component”

A network of infrastructure assets refers to assets that collectively provide a particular type of service for the government, ranging from a single asset to multiple integrated components. Each component is a distinguishable part—for instance, the curb or gutter of a road is considered a component, but it is still essential to the road’s overall function.

Measurement and Depreciation Approaches

The draft retains the two measurement bases from GASB 34:

1. Historical Cost (net of accumulated depreciation)

2. Modified Approach

Key clarifications include:

• If a component’s cost is significant relative to the total, and its useful life is substantially different, it should be recognized as a separate infrastructure asset for depreciation and disclosure purposes.

• Governments must periodically review the useful lives and salvage values to ensure accurate depreciation calculations.

Enhanced Disclosure Requirements

Governments using the historical cost approach will need to disclose:

• Historical cost, accumulated depreciation, and a historical cost weighted average for assets exceeding 80% of their estimated useful life.

• Separate disclosure for assets at 100% of their estimated useful life versus those between 80% and 100%. This heightened transparency helps users assess the condition and age of key infrastructure, which is crucial given widespread concerns about aging public assets.

Updates to the Modified Approach

Modifications to the modified approach simplify some requirements, focusing on:

• Maintaining an up-to-date asset inventory

• Performing regular condition assessments

• Annual estimation of costs necessary for maintenance and preservation

• Documenting that assets are maintained at or above required condition levels

The requirement for a description of the modified approach in financial statement notes is removed, reflecting its long-standing familiarity among governments.

Note Disclosure: What’s New?

Infrastructure should be clearly divided by network in note disclosures, with a brief summary of monitoring, maintenance, and preservation policies cited in the footnotes.

Effective Date and Next Steps

• Proposed effective date: Fiscal years beginning after June 15, 2028 (fiscal and calendar 2029)

• Early adoption permitted

• Application is primarily prospective, with certain exceptions

GASB is actively seeking feedback on the exposure draft. Stakeholders are encouraged to submit comments and help shape the future of infrastructure reporting.

For CPAs and accounting professionals, these changes represent an important evolution in the way governments report and maintain transparency about their critical infrastructure. Staying current with these proposals ensures you can provide up-to-date, actionable guidance to your organization or clients.