For the depreciation of infrastructure....

Question

Quizplus · Accepted Answer

Governments are permitted a choice to use the modified approach or to record depreciation in the same manner as other depreciable fixed assets for infrastructure. The modified approach involves reporting infrastructure assets in the financial statements at their historical cost less any accumulated depreciation, but not recording annual depreciation charges. Instead, the government reports the annual decline in the condition of the infrastructure and the estimated costs required to maintain its service potential. This allows a government to report infrastructure assets at their estimated fair value without recording depreciation. However, it is important to note that the modified approach is not permitted under International Public Sector Accounting Standards (IPSAS), which require governments to record depreciation in the same manner as other depreciable fixed assets.

For the Depreciation of Infrastructure