GASB 34--Methods for Condition Assessment and Preservation

Chait, E. P., Cambridge Systematics, McDaniel, W., Gunasekera, K. (2008). GASB 34--Methods for Condition Assessment and Preservation. Washington, DC: Transportation Research Board.

This research report delved into the transportation application of GASB 34, an accounting reporting process issued by the Government Accounting Standards Board (GASB). To find the documentation on the requirements of this pronouncement, please go the GASB web site, http://www.gasb.org/. The Transportation Board engaged in the study to investigate "the methodologies that integrate infrastructure inventory, condition assessments, minimum acceptable condition levels, and funding decisions with GASB 34"(p. 1).

In the summary of the report, the researchers drew a number of conclusions. First, those organizations that adopted GASB 34, integrated it seamlessly as an additional task into their work plan. Second, the implementation of GASB 34 did not increase public interest in the condition of asset infrastructure. Despite the insouciance, the researchers classified GASB 34 application as a "key aspect of asset management best practice" (p.1).

The states and agencies that participated in the report included the departments of transportation of Florida, Ohio, Oregon, Texas, and Washington. Other organizations ranged from Fitch Ratings, GASB, Hillsborough County, FL, City of Saco, ME, and the Washington Suburban Sanitary Commission, MD. The last and Oregon employed the depreciation approach, the remaining, applicable organizations instituted the modified approach. The survey that these groups responded to addressed the following aspects of GASB 34: "(1) A process for setting condition targets, (2) methods of condition assessment, (3) linkage between condition targets and expenditure requirements, including budgetary requirements; (4) allocation of costs among capital, preservation, and maintenance categories; (5) accounting for additions, retirements,and replacements of infrastructure assets; (6) potential effects on bond rating; (7) operational and financial impacts of reporting" (p. 5).

The report ended with recommend strategies for each of these topics.