PS 3150: Implications for Infrastructure Valuation, Accounting and Management

The Canadian Institute of Chartered Accountants (CICA) introduced PS 3150 Tangible Capital Asset to encourage the valuation and amortization of long-lived municipal infrastructure. Although based on a historic cost valuation method, PS 3150 is intended as a first step to support appropriate accounting and management of infrastructure assets. In this paper, the authors briefly discuss the broad aim of asset valuation, the basic approach of PS 3150 in this regards, and two case studies intended to illustrate the valuation and amortization method advocated in PS 3150. The authors are careful to distinguish between the needs of financial accountants, on the one hand, and financial managers, on the other hand.