Modified Approach to Reporting Infrastructure

Most, if not all, Tennessee counties report their infrastructure on an individual asset  basis. However, the GASB allows for a modified approach for infrastructure  reporting. Under the modified approach, counties still are required to perform an initial retroactive capitalization of county-owned infrastructure (if over the $10  million threshold mentioned previously). However, instead of annually depreciating  each infrastructure asset, the county must calculate a “maintenance of effort”  amount that reflects the current costs for preserving infrastructure in lieu of depreciation. Counties are discouraged from implementing the modified approach since use of this method requires a county to periodically engage independent engineering consultants to perform condition assessments and demonstrate that all  infrastructure has been maintained at or above a prescribed level.