Write the following in your own words: In Concepts Statement No. 1, Objectives of Financial Reporting, the GASB set forth the purpose of capital asset reporting and laid the foundation for the current provisions:
Governments report general capital assets as expenditures when they construct or acquire them in their governmental fund statements which are accounted for on a modified accrual basis. Thus governments maintain the "off the balance sheet" record of these assets.
GASB Std. # 34 requires that in Government-wide statements, governments capitalize capital assets and depreciate them over their economic lives.
GASB Std. # 34 mandates that governments account for their infrastructure assets just as they do other capital assets. However, governments are not required to depreciate infrastructure assets if they preserve them at a specified "condition level."
Investments made by governments are of concern because of the substantial risk that investors can incur through default, declines in value and even fraud.
GASB through its standards requires disclosure of a wide range of investment information