CLASSIFYING PROPERTY - INFRASTRUCTURE - 8610.6

(Renumbered: 10/2020)

(Revised 10/2020 and renumbered from 8610)

Infrastructure assets are long-lived capital assets/property that typically are stationary in nature and can be preserved for a significantly greater number of years than most capital assets.

Examples of infrastructure assets include:

• Roads
• Bridges
• Tunnels
• Drainage systems
• Water and sewer systems
• Dams
• Lighting systems

The capitalized costs include the purchase price or construction cost and the related costs incurred that are necessary to place the asset in its intended location and in a condition where it is ready for use. The related costs include:

• Professional fees of engineers
• Attorneys
• Appraisers
• Financial advisors
• Survey fees
• Appraisal and negotiation fees
• Damage payments
• Site preparation costs
• Cost related to the demolition of unwanted structures

Land associated with an infrastructure asset must be reported separately as land. Buildings associated with infrastructure should be reported as buildings unless they are purely related to an infrastructure network or system (e.g., rest area facilities for a state highway or water pumping stations associated with water systems).

The state uses the modified approach to report the cost of its highway infrastructure assets. Under the modified approach, the state capitalizes all costs that add to the capacity and efficiency of state-owned roads and bridges and meet the capitalization threshold in SAM section 8602. All maintenance and preservation costs are expensed and not capitalized.

Record Infrastructure that uses the modified approach for reporting cost in Account 1606000 (Legacy Account 2361).

Record Infrastructure not using the modified approach for reporting cost in Account 1606590 (Legacy Account 2362).