Maintenance Capitalization

Infrastructure assets not depreciated have their maintenance and preservation costs expensed in the period in which they are incurred, however, the costs of improvements and additions that increase capacity or efficiency are capitalized. Thus the following illustrates VDOT’s capitalization policy.

VDOT Maintenance activities are associated with asset types.VDOT capitalization policy identifies the following assets as being eligible for capitalization: Flexible pavements, Rigid Pavements, Non-Hard Surface Lanes, Bridge Decks, Bridge Superstructures, Bridge Substructures.

All costs associated with maintaining VDOT roadway assets are processed in our Financial Management System using an activity code. Some examples of these costs include labor hours, overhead, contractual services, materials testing, etc. VDOT Maintenance activities can generally be divided into three groupings: Operations, Preventive, and Restorative. VDOT and the Auditor of Public Accounts have determined that operations and preventive activities are taken into account when the useful life of an asset is determined, thus they are expensed in the fiscal year incurred. Only restorative activities are capitalized, as they increase the serviceability or extend the useful life of the asset.

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Page last modified: Oct. 14, 2012