With Regard to Accounting for Infrastructure, Which of the Following

question 22

Multiple Choice

With regard to accounting for infrastructure, which of the following is true?

• A) Unlike other capitalized assets, infrastructure assets should never be depreciated.
• B) The costs of general government infrastructure assets should be recognized as expenditures in governmental fund statements as the costs are incurred.
• C) Governments that choose to apply the modified approach to accounting for infrastructure need not capitalize infrastructure assets.
• D) Under the modified approach, governments should capitalize both the initial costs of infrastructure assets and subsequent outlays intended to preserve and extend the assets' useful lives.

---

Definitions:

Units-Of-Production

A depreciation method that allocates an asset's cost based on its usage, output, or production, rather than mere passage of time.

Double-Declining-Balance

An accelerated method of depreciation that doubles the regular depreciation rate, reducing the asset's value more quickly.

Straight-Line

A method of calculating depreciation or amortization by evenly allocating the cost of an asset over its useful life.

Salvage Value

The projected residual worth of an asset after it has served its intended period.