A Theoretical and Empirical Study for Budgeting and Accounting of Infrastructure Assets

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We have two fundamental problems in management for infrastructure assets such as roads and water systems. The one is how to construct them efficiently and the other is to maintain them efficiently. However it hardly considers to finance the replacement investment and adequate maintenance. Therefore in this research project, we have investigated not only what is the useful financial information in management of infrastructure assets but how budgeting should be related to accounting. The main research findings as follows :1. Infrastructure assets, whether or not, should be recorded at the depreciated replacement cost in the balance sheet and depreciated. In order to keep the service potential for the national economy, budgeting has to be balanced with the service cost.2. It is desirable that the impact of investment and maintenance on public finance remains unchanged from generation to generation and by fiscal year. Accordingly, the net assets in the balance sheet have to be kept constant. This may contribute to lower the fluctuation of tax burden.