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1. GASB 34 -A Texas Approach
Duane Sullivan, CPA Joe Graff, P.E
Director of Accounting Director of Maintenance
3. TxDOT’s InfrastructureYear 2000 Interstate lane miles 14,375
Freeway lane miles 7,164
Non-freeway lane miles 151,709
Frontage road lane miles 12,936
Bridge class structures 32,000 +
ROW acres 1,100,000 +
4. Comptroller’s GASB Task Force Texas Comptroller’s office formed a task force comprised of financial representatives from several state agencies and universities
Task force was split into separate teams to address the different areas covered by GASB 34 and develop new procedures
Capital asset team developed the Capital Asset Guide which has been adopted and published by the Comptroller’s office
6. Capital Asset Guide - Land Land is the surface or crust of the earth, which can be used to support structures, and may be used to grow crops, grass, shrubs, and trees. Land is characterized as having an unlimited life (indefinite).
Land improvements consist of betterments, site preparation and site improvements (other than buildings) that ready land for its intended use. The costs associated with improvements to land are added to the cost of the land.
7. Capital Asset Guide - Buildings A building is a structure that is permanently attached to the land, has a roof, is partially or completely enclosed by walls, and is not intended to be transportable or moveable. Buildings that are an ancillary part of the state’s highway network, such as rest area facilities and toll buildings will be reported as infrastructure rather than as buildings.
8. Capital Asset Guide - Bldg Improvements Building improvements are capital events that materially extend the useful life of a building or increase the value of a building, or both. Improvements should be capitalized and recorded as an addition of value to the existing building if the expenditure for the improvement is > $100,000 or the expenditure increases the life or value of the building by 25 percent of the original life period or cost.
9. Capital Asset Guide - Facilities & Other Improvements Assets (other than general use buildings) built, installed or established to enhance the quality or facilitate the use of land for a particular purpose. (parking lots, fencing, etc)
Depreciable improvements made to a facility or to land that should be capitalized as a betterment if the improvement is at the capitalization threshold or the expenditure increases the life or value of the asset by 25 percent of the original cost or life period.
10. Capital Asset Guide - Infrastructure Long-lived capital assets that normally are stationary in nature and can be preserved for a significantly greater number of years than most capital assets. Infrastructure assets are often linear and continuous in nature.
11. Capital Asset Guide - Infrastructure Improvements Capital events that materially extend the useful life or increase the value of the infrastructure, or both. Infrastructure improvements should be capitalized as a betterment and recorded as an addition of value to the infrastructure.
12. Capital Asset Guide - Personal Property Fixed or movable tangible assets to be used for operations, the benefits of which extend beyond one year from date of acquisition and placement into service.
Improvements or additions to existing personal property that constitute a capital outlay or increase the value or life of the asset by 25 percent of the original cost or life should be capitalized as a betterment and recorded as an addition of value to the existing asset.
13. Capital Asset Guide - Library Books/Materials Generally a literary composition bound into a separate volume and identifiable as a separate copyrighted unit. Library reference materials are information sources other than books, i.e. journals, periodicals, microforms, etc., and similar items which provide information essential to the learning process or which enhance the quality of academic, professional or research libraries. Changes in value for professional, academic or research libraries may be reported on a aggregated net basis.
14. Capital Asset Guide - Works of Art/Historical Treasures Collections or individual items of significance that are owned by a state agency which are not held for financial gain, but rather for public exhibition, education or research in furtherance of public service. Collections or individual items that are protected and cared for or preserved and subject to an organizational policy that requires the proceeds from sales of collection items to be used to acquire other items for collections.
15. Capital Asset Guide - Software Developed Internally State Agencies
State agencies will record the payment for the purchase of computer software whose unit value cost is $5,000 or greater and has an estimated useful life of more than one year. Capitalization of computer software includes software license fees if the total dollar amount of the fee divided by the number of units served (terminals) meets the criteria to capitalize the purchase.
16. Capital Asset Guide - Software Developed Internally Colleges and Universities (AICPA SOP-98-1)
For software to be considered for internal use, the
college/ university must meet the following tests:
The software must be acquired, internally developed or modified solely to meet the college/university's
internal needs, and
During the software’s development or modification, the college/university must not have a substantive plan to market the software externally to other organizations.
17. Capital Asset Guide - Leasehold Improvements Construction of new buildings or improvements made to existing structures by the lessee, who has the right to use these leasehold improvements over the term of the lease. These improvements will revert to the lessor at the expiration of the lease. Leasehold improvements do not have a residual value.
18. Capital Asset Guide Web address
19. Capital Asset Guide - Thresholds Land/land improvements Capitalize All
Buildings/bldg improvements $100,000
Facilities & other improvements $100,000
Personal property (equipment) $5,000
Library books/materials (collections) Capitalize All
Works of art/historical treasures Capitalize All
Software developed for internal use -
Colleges & Universities only $100,000
Leasehold improvements $100,000
20. Indirect Cost Plan Since TxDOT does not have a multi-year cost allocation plan, TxDOT will implement the $5,000 (currently $1000) personal property threshold September 1, 2001. The impact on the indirect cost rate is expected to be negligible.
Other state agencies may delay the implementation until they have renegotiated their cost allocation plan with the appropriate federal agencies.
21. Donations Donations of engineering, right of way, materials, etc. will be initially recorded as revenues at fair market value
Where a donated asset is used for a capitalizable event, the donated asset will be capitalized, otherwise it will be expensed
22. Bridge - Definition CFR Title 23 - Highways Sec. 650.301 Application of Standards (paraphrased)
A bridge is defined as a structure including supports erected over a depression or an obstruction and having a track or passageway for carrying traffic or other moving loads, and having an opening measured along the center of the roadway of more than 20 feet between undercopings of abutments or spring lines of arches, or extreme ends of openings for multiple boxes; it may also include multiple pipes, where the clear distance between openings is less than half of the smaller contiguous opening.
23. Why Depreciate Bridges?
Require little maintenance
Replaced in total
Useful lives can be readily estimated
24. Bridges 9 identified types
Concrete girder- pan Girder prest - I
Concrete girder - tee Concrete slab
Culvert Girder prest - box
Steel girder Steel truss
25. Bridges - Concrete Girder Pan
26. Bridges - Concrete Girder Tee
27. Bridges - Culvert
28. Bridges - Steel Girder
29. Bridges - Timber Stringer
30. Bridges - Girder Prest I
31. Bridges - Concrete Slab
32. Bridges - Girder Prest Box
33. Bridges - Steel Truss
34. Bridges - Inventory Current information/inventory
Bridge Inventory, Inspection and Appraisal Program (BRINSAP)
Unique ID numbers
Location and feature crossed
Deck length and width
35. Bridges - Inventory Future information/inventory
ACCESS database to track changes to bridge inventory
Excel spreadsheets uploaded to intranet website will allow districts to view their current inventory
Intranet website will provide downloadable forms
36. Bridges - Inventory Future information/inventory (continued)
Districts will be required to submit information on bridges removed from service, improved bridges, and newly constructed bridges
District Engineers will be required to certify that their inventory is correct
37. Bridges - Financial System Financial Information Management System
38. Bridges - Historical Cost Began with current replacement cost for each type of bridge
Used a capitalization threshold of $500,000
Calculated historical cost using FHWA cost indices for structures
Useful lives as determined by American Appraisal Associates
39. Bridges - Historical Cost
40. Estimating Useful Life
41. Comparison of Estimated Useful Lives for Bridges
42. Bridges - Reporting
Capitalized when placed in service
Separate asset group on balance sheet
Depreciation based on composite method
43. Right of Way - Historical Cost
1917 - 1956 Estimated based on the average of ROW costs (10.59%) to Construction Costs for the years 1957 - 1999
1957 - 2000 Financial Reports and Financial Information System
44. Right of Way- Historical Cost
45. Right of Way - Historical Cost
46. Right of Way - Historical Cost
47. Requirements for Using the Modified Approach Maintain an inventory
Perform condition assessments at least once every 3 years
Maintain the system at a predetermined condition level
Disclose needed versus actual maintenance expenditures to maintain condition level
48. Highways - Inventory Roadway inventory system
Type of road
Number of lane miles
49. Highways TxDOT will report the roadway system in two categories
Other non-interstate (state highways, farm to market, etc…)
50. Highways - Historical Cost Resources
AASHO, the 1st 50 Years (1914-1964)
TxDOT financial statements (1965-present)
51. Highways - Historical Cost
52. Highways - Historical Cost
53. Highways - Historical Cost
54. Highways - Historical Cost Method
Calculated cumulative “construction” expenditures excluding estimated ROW and bridge costs.
Multiplied the result by .65 (100% less 35% attributable to maintenance)
.65 x $ 32,724,088,901 = $ 21,270,657,785
55. Capital versus Maintenance Paving shoulders
Removing weight limits
Increasing drainage capacity
Adding new signals, pavement markers,etc.
Adding a grade crossing
56. Maintenance vs Construction