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Order information
Product Number 02590
Price: $40.00
Order Form
Staff contact
Tim Beauchamp, CMA
research.studies@cica.ca
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Executive Summary
Project objective
The objective of this Research Report is to explore alternatives for accounting and financial reporting of infrastructure as assets and determine what other information about them could be provided by governments. The Study Group that was established to undertake the project was given the following terms of reference:
- Summarize the reasons for and the purpose of reporting infrastructure in a government's financial statements.
- Determine whether current accounting practices meet the information needs set out in the first term of reference.
- Consider whether there are infrastructure assets that have special characteristics that distinguish them from other types of capital assets.
- Consider what information should be generated and reported about infrastructure assets in order to provide accountability to a government's financial statement readers about how they are being managed.
- Explore the alternative methods of measuring infrastructure, for example, cost, current value and replacement value, and determine which method is most appropriate.
- Analyze the possible methods of accounting for infrastructure, for example, capitalization and amortization, or renewals accounting, and determine which method is most appropriate.
- Explore whether infrastructure assets should be accounted for as an entire system or as individual components.
- Consider how information about deferred maintenance and asset replacement could be measured, accounted for and reported in financial statements.
- Consider what other relevant supplementary information about infrastructure should be reported, for example, kilometres of roads, etc.
- Provide illustrations of the type of information that would be useful for reporting on infrastructure in the financial statements.
To better define the scope of the study, the Study Group placed the following limitations on the objective. - "Infrastructure" are those systems used for: utility operations including water and sewer systems, hydro-electric systems and telecommunications; roads including highways, other roadways, bridges and traffic control; transportation including transit systems, airports, seaports, tunnels and seaways; and flood control including dams, canals, locks and drainage.
- "Financial statements" are the summary (general purpose) financial statements, prepared by a government and its organizations to report on financial position, results of operations and changes in financial position to the public and other users.
- "Government" refers to the federal, provincial, territorial and local governments and their organizations as defined in CICA Public Sector Handbook Section PS 1300 "Financial Reporting Entity."
The recognition, measurement and accounting for specific revenue, debt or equity related to financing infrastructure is beyond the scope of this report.
(Study Group Chair - John McGowan, CMA, Alberta Urban Municipalities Association) (CAmagazine, June/July 2000, p. 37, "The Infrastructure Web" by Tim Beauchamp)
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