Depreciation is required to be reported in the government-wide financial statements. Capital assets, except for land, land preparation, library books, construction in progress, and infrastructure assets reported using the modified approach, must be depreciated over their estimated useful lives as indicated in Section XIV.14.E - Recording General Capital Assets of this Chapter.

To record certain infrastructure assets using the modified approach, the State must:

• Maintain an asset management system that includes a current inventory of eligible infrastructure assets;
• Conduct condition assessments of eligible assets and summarize the results using a measurement scale;
• Estimate each year the annual amount necessary to maintain and preserve the eligible assets at the condition level established and disclosed by the State; and
• Document that the assets are being preserved approximately at, or above, the established condition level.

Guide to Financial Operations

REV. 09/03/2025