In parts one and two of this series, we examined capital assets reporting, focused on the need to include infrastructure assets (e.g. roads, bridges, sewers, etc.) in the capital asset categories, and discussed the reporting of depreciation expense. In this article, we will examine implementation of these changes.

Implementation Timetable
When to act? The table below indicates required implementation dates for the 3 Phases of entities:

General Requirements Timetable
Entities	General Provisions	First
Revenues(1)	Years beginning after	Fiscal Year
At least $100 million	6/15/2001	7/1/2001-6/30/2002
At least $10 and <$100 million	6/15/2002	7/1/2002-6/30/2003
Less than $10 million	6/15/2003	7/1/2003-6/30/2004

Retroactive Statement of Infrastructure Timetable
Entities	Retroactive Infrastructure	First
Revenues(1)	Years beginning after	Fiscal Year
At least $100 million	6/15/2005	7/1/2005-6/30/2006
At least $10 and <$100 million	6/15/2006	7/1/2006-6/30/2007
<$10 million	Optional	Optional

(1) Primary government's Governmental and Enterprise funds' revenues for first fiscal year ending after 6/15/1999.

Rationale For "3-Phase" Implementation
The Board agreed to grant an extension of time to implement the new model for smaller governments based on differences in the resources (human or financial) potentially available for implementation. This approach would more directly benefit the smaller governments themselves than the users of their financial statements, but it also could benefit users. That is, a delay for entities with fewer resources would enable them to benefit from the report preparation and audit experiences of entities that had implemented earlier.

Capitalizing on a "learning curve" in this way could save resources for smaller governments and could provide for a smoother transition - which ultimately should benefit users as well. The Board concluded that a three year phase-in would provide for a smoother transition than a two phase plan because it will provide more opportunity for smaller entities to use the experience of governments that have implemented earlier and that are closer to themselves in complexity of operations and resource levels.

For example, the smallest local governments may find the experiences of medium- to small-size local governments (Phase 2) of a similar type more relevant than the experiences of the state government or the largest counties or cities in the state. Also, as the number and variety of governments that have implemented increases, so too should the usefulness of workshops, journal articles, and other sources of assistance based on their experiences. However, it will take time for updates to these sources of information to occur. Two phases following the initial phase will allow more time for governments with the smallest amount of resources to benefit from all sources of assistance based on the latest information available.

Governments that are blended or discretely presented component units would be required to implement the standard when the related primary government is required to implement. The concern was that users might get confused if governments were only able to partially implement the standard. The hope is that primary governments will be able to assist smaller component units with resources needed to implement the standard.

Coordination with FASB Rules
Governmental activities are required to apply FASB pronouncements (and those of its predecessors) that do not conflict with GASB pronouncements and that have been issued on or before November 30, 1989. Although many of the transactions considered in the FASB's and its predecessors' pronouncements may not take place or take place rarely within governmental activities (such as product financing arrangements), the Board agreed to adopt the pronouncements based on the belief that it will be better to embrace these standards now than to have to create a new GASB standard should the accounting for these transactions become an issue later.

Certain of those pronouncements (and GASB Statement 23) would require a "transitional amount" (the beginning balance) to be calculated when first applied to governmental activities. For practical reasons, primarily to ease the implementation burden as much as possible, the Board determined that those particular pronouncements may be applied prospectively.

Summary
With a more comprehensive view of a government's operation and financial position, the government-wide perspective will require reporting of all capital assets, including infrastructure assets. Governmental entities will also need to record and report depreciation expense for all capital assets rather than just enterprise fund assets as previously done.

The new reporting model begins phasing in for periods beginning after June 15, 2001. However, for infrastructure, an extended implementation period allows prospective reporting between the effective date and four years later. Subsequently, even retroactive infrastructure assets are to be included in capital assets reported.