GASBS No. 34 represents a dramatic shift in the way state and local governments report and present general infrastructure assets. Using Comprehensive Annual Financial Reports for the 50 states, Puerto Rico, and the District of Columbia, we find that financial statement users are unable to determine the extent of retroactive capitalization of these assets due to the lack of detailed disclosures provided by these governments. Comparing the status of infrastructure assets among the governments is also extremely difficult because governments using depreciation accounting have significant variation in the maximum useful lives of these assets and governments choosing the modified approach use different measurement methods and baselines. Given the need for comparability across governments and Standard & Poor's concern about how governments identify capital assets and their depreciation assumptions and processes, we suggest the GASB explicitly require governments to disclose the extent that infrastructure assets are capitalized and consider whether it is feasible to provide a list of acceptable measurement scales and condition levels for the modified approach. We also suggest that government officials and auditors further examine whether governments are meeting the requirements of the modified approach and whether the useful lives adopted for depreciation accounting are consistent with the physical lives of these assets. By enhancing the reporting transparency for infrastructure assets, governments can significantly increase the usefulness of these disclosures.

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