The Financial Effect of Funding Infrastructure Depreciation

Abstract

Developing mechanisms to finance the rehabilitation of infrastructure requires that civil engineers understand company finance. In addressing the basics in infrastructure replacement accounting, attention is given to the way in which depreciation of infrastructure is to be treated in financial statements. Also considered are the implications for an organization's financial position if depreciation is funded. It is shown how the funding of depreciation is an investing activity and therefore has an effect on the amount of cash available.