Letter to GASB on Infrastructure Assets Exposure Draft

June 23, 2026

Director of Research and Technical Activities
Project No. 3-43
GASB

RE: Infrastructure Assets

Dear Director:

The Virginia Society of CPAs (VSCPA) Accounting & Auditing Advisory Committee has reviewed the Exposure Draft (ED) — Infrastructure Assets, issued by the Governmental Accounting Standards Board (the Board). The VSCPA is the leading professional association in Virginia dedicated to enhancing the success of all CPAs and their profession by communicating information and vision, promoting professionalism, and advocating members’ interests. The VSCPA membership consists of nearly 11,000 individual members who actively work in public accounting, private industry, government, and education.

Componentization — We have concerns about the requirements in paragraph 6 that require separately depreciating those components that represent a significant portion of the total cost of an infrastructure asset and have a substantially different estimated useful life. For integrated networks and systems, accounting standard-setting should defer to the data architecture established by asset managers and engineers. Requiring granular componentization into the general ledger creates an artificial administrative burden, risks decoupling financial reporting from operational assessments, creating an additional reconciliation burden that adds costs without providing material benefit to the users of financial statements. To that end, we agree with the alternate view expressed in paragraphs B61 through B63, which directly supports our concerns with paragraph 6 and the difficulty that governments may encounter in valuing components due to the current aggregation of infrastructure assets. We also have similar concerns with the note disclosure requirements for division by network required by paragraph 9. We request that the Board reconsider the feasibility of these requirements, as we believe both requirements will be cumbersome and complex for the entities involved. The Board’s considerations related to benefits and costs in paragraphs B14 and B22 did not reduce those concerns. Depreciation is an estimate, and we believe the level of precision implied by considering a component approach in this case exceeds the needs of the users of the financial statements.

Similarly, regarding paragraph 7 and the Board’s considerations in B19, which require preparers to review and periodically reassess useful lives, we encourage additional supporting guidance to ensure cost-beneficial application. For example, maintenance and lifecycle practices adopted by the government should be reflected in such periodic reviews. Guidance on the expected frequency of these assessments or specific circumstances that should prompt reassessment, including asset impairment, would assist preparers in meeting the requirements efficiently.

In addition, regarding paragraph 18, the proposed one-time cumulative retrospective adjustment at implementation, related to the reassessment of estimated useful lives and salvage values of infrastructure assets, may present operational challenges, particularly for governments with long-lived assets and limited historical data. This approach is also not consistent with the prospective treatment generally applied to changes in accounting estimates for other capital assets. We also note an internal asymmetry: paragraph 7 requires that ongoing periodic reviews of useful lives be performed, and changes resulting from those future reviews would presumably be treated prospectively as changes in estimate in accordance with GASB Statement No. 100. Yet the identical first-time review performed at implementation under paragraph 18 triggers retroactive restatement of beginning net position. We believe this distinction is difficult to justify on a conceptual basis and may create confusion among preparers. We encourage the Board to consider providing practical and consistent implementation guidance to support this transition.

Regarding paragraph 11 and subsequently B27 through B29, we believe that the requirement to disclose infrastructure assets exceeding 80 percent of their useful lives will add burden to compiling the financial statements. If the Board proceeds with this requirement, we encourage the Board to consider including an additional illustration to Appendix C.1 of the disclosure in tabular format. Disclosing such information in a narrative manner may adversely impact user readability and comprehension, especially when there are numerous infrastructure networks involved.

Modified Approach — Regarding the Board’s proposal at paragraph 12 to rescind the definition of the modified approach as discussed in paragraphs B30 to B32, we believe this disclosure may be essential to users’ understanding of the related financial information based on a general lack of user awareness of the modified approach and recommend the Board reconsider its removal.

Policy Disclosures —Regarding the Board’s proposed guidance in paragraph 10 that a government should disclose its policy for monitoring and maintaining or preserving infrastructure assets within its summary of significant accounting policies if they have one, this approach is inconsistent with investment disclosure requirements in Codification Section I50, where entities must state if they do not have certain policies in place. The Board should consider requiring disclosure if an entity does not have a policy. We believe it is important to emphasize that governments may not necessarily have a formal policy and that interdisciplinary relationships often exist in governments responsible for setting such a policy. That is, infrastructure management is driven by operational, engineering, budgeting and legislative needs and not necessarily centralized accounting policies.

The VSCPA appreciates the opportunity to respond to this ED. Please direct any questions or concerns to VSCPA Vice President, Advocacy & Pipeline Emily Walker, CAE, at ewalker@vscpa.com or (804) 612- 9428.

Sincerely,

Elissa Obillo, CPA
Chair 2026-2027
VSCPA Accounting & Auditing Advisory Committee

VSCPA Accounting & Auditing Advisory Committee 2026-2027

Elisa Obillo, CPA — Chair
Domenic Savini, CPA — Vice Chair
Scott Cohen, CPA
Jonathan Head, CPA
Clarissa Hoffman, CPA
Joshua Keene, CPA
Daniel Martin, CPA
John McIntosh, CPA
Kendra Morgan, CPA
Brook Peterson, CPA
Michael Phillips, CPA
Amy Stokes, CPA
Clara Tang, CPA
Charles Valadez, CPA
Anna Wagner, CPA
Patrick Wunderlich, CPA
Natalya Yashina, CPA