Governments can choose between regular depreciation to expense infrastructure repairs, or the modified (not to be confused with modified accrual) approach. Under regular depreciation, the government would depreciate infrastructure like they would any other capital asset, expense general repairs, and capitalize improvements and additions.
The modified approach does not have depreciation expense, and only additions are capitalized; improvements and general repairs are expensed.
Governments can choose between regular depreciation to expense infrastructure repairs, or the modified (not to be confused with modified accrual) approach. Under regular depreciation, the government would depreciate infrastructure like they would any other capital asset, expense general repairs, and capitalize improvements and additions.
ReplyDeleteThe modified approach does not have depreciation expense, and only additions are capitalized; improvements and general repairs are expensed.