Lake Worth Texas Finance Department: Modified Approach

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Modified Approach for Infrastructure Assets

SUBJECT: Modified Approach for Infrastructure Assets

Policy:

	Infrastructure capital assets accounted for under the Modified Approach will be managed using an acceptable Asset Management System.
	The City will document that the eligible infrastructure assets are being preserved approximately at (or above) a condition level established by the City.
	Depreciation expense is not reported for eligible infrastructure capital assets that are reported by the Modified Approach.
	Expenditures to preserve the useful life of eligible infrastructure capital assets that are reported by the Modified Approach should be expensed in the period incurred. Additions and improvements to eligible infrastructure capital assets that increase the capacity or efficiency of the infrastructure assets should be capitalized.
	Eligible infrastructure capital assets reported under the Modified Approach are reported separately from depreciated infrastructure capital assets.

General:

	When used, the Modified Approach should be applied to eligible infrastructure assets composing either a network or a subsystem, and should be applied to all assets within the chosen network or subsystem
	The City will no longer use the Modified Approach for eligible infrastructure assets if it fails to meet the above requirements for those assets

Responsibility

Action

Responsible Department

	Meet the following minimum requirements of an acceptable asset management system.
	Report an up to date inventory of eligible infrastructure assets.
	Perform and document replicable condition assessments of the eligible infrastructure assets and summarize the results using a measurement scale in a consistent manner at least every three years.
	Document the results of the three most recent complete condition assessments showing that the eligible infrastructure assets are being preserved at or above the condition level established and disclosed by the City.

Estimate each year the annual amount to maintain and preserve the eligible infrastructure assets at a condition level established and disclosed by the City.

Responsibility

Action

Accounting Department

Disclose the Required Supplementary Information in the Comprehensive Annual Financial Report for eligible infrastructure assets using the Modified Approach.

Procedure Coordinator: Director of Finance