Intangibles: Governments' Forgotten Capital Assets

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Dwayne McSwain PhD, Associate Professor (Creator)
Appalachian State University (ASU )
Web Site:

Abstract: Prior to implementing Governmental Accounting Standards Board (GASB) Statement 34, Basic Financial Statements -- and Management's Discussion and Analysis -- for State and local Governments, governments typically reported few, if any, of their intangible assets in their financial statements. Some governments may have recognized easements for roads that they purchased as capital assets, but they typically did not recognize such easements if they were donated to the government (for example, by a developer). Since GASB issued Statement 34, which specifically refers to easements and intangible assets that are used in operations as capital assets, preparers of governmental financial reports have asked a number of questions. These questions include the following: Should land under roads be reported if the land is not owned, but easement rights exist? Does it make a difference if the easement was donated instead of purchased? Should water rights be reported? Should internally generated computer software be reported as an intangible asset, or written off? Should other internally generated intangible assets, such as patents and trademarks, be reported? Should any, or all, intangible assets be amortized? GASB Statement 51, Accounting and Financial Reporting for Intangible Assets, which was issued in June 2007, provides guidance for these questions and many more by clarifying the financial reporting requirements for intangible assets established in Statement 34.

Additional Information

Dwayne N. McSwain, Terry K. Patton, and Daniel C. Benco (2008). "Intangibles: Governments' Forgotten Capital Assets," The CPA Journal, April 2008, pages 40-43. Publisher version of record available at:
Language: English
Date: 2008
Capital assets, Intangible assets, Governmental Accounting Standards Board (GASB), water rights, easement rights, Statement 34

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