Infrastructure Reporting and State Bond Ratings

Benson, Earl D.; Marks, Barry R.

doi:10.1111/pbaf.12156

Cited by 3 publications

(1 citation statement)

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“…GASB 34 was also found to have a positive effect on state highway quality (both directly and indirectly through spending), with a stronger effect in states using the modified reporting approach (Kim et al, 2018). The use of the modified approach was also found to reduce bid spreads for municipal bonds (Bloch et al, 2016) and to affect bond ratings (Benson & Marks, 2017).…”

Section: Literature Reviewmentioning

confidence: 99%

Asset Maintenance Practices and Challenges in U.S. Counties

Kim

Ebdon

2020

Public Works Management & Policy

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This study explores capital asset maintenance practices and challenges in U.S. counties, which have been understudied in previous public administration research. We also compare the current practices with those found in the 2001 Government Performance Project (GPP) analysis. Interviews with 20 officials in 12 counties revealed six themes. Four of these are concerned with maintenance challenges: the economic environment, politics, human resources, and information systems. The other two themes relate to efforts that have been made by these counties to enhance maintenance through cost management and additional funding. Overall, we found that asset maintenance in these counties was negatively affected by the Great Recession, and that there is still a substantial level of unfunded maintenance, which is only slightly better than what was reported in the GPP, despite a recent focus on improvements.

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Section: Literature Reviewmentioning

confidence: 99%

Asset Maintenance Practices and Challenges in U.S. Counties

Kim

Ebdon

2020

Public Works Management & Policy

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Accounting policies in the public sector: Characteristics and consequences of accounting for capital assets

McDonough

Yan

2023

Journal of Accounting and Public Policy

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Maintaining maintenance: The real effects of financial reporting for infrastructure

McDonough,

Yan

2024

Contemporary Accting Res

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We use the adoption of General Accounting Standards Board Statement No. 34 (GASB 34) to examine whether disclosing information in states' financial reports influences their investment decisions. GASB 34 requires governments to report on general infrastructure assets and permits either the standard depreciation approach or the modified approach. The modified approach requires additional disclosures, a step which we argue promotes greater transparency about a government's infrastructure and can potentially facilitate infrastructure investment decisions. We find a robust positive association between the modified approach and investment in infrastructure maintenance. Additional evidence demonstrates a more pronounced effect when external monitoring is likely higher and government officials are likely better informed as a result of the increased disclosure. We further find that states using the modified approach are less likely to cut or divert funds intended for infrastructure maintenance. Our study suggests that disclosing information in governments' financial reports can have real effects, such as mitigating underinvestment in infrastructure maintenance, which governments often defer to future periods in violation of the interperiod equity principle and to the detriment of society.

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Infrastructure Reporting and State Bond Ratings

Cited by 3 publications

References 13 publications

Asset Maintenance Practices and Challenges in U.S. Counties

Asset Maintenance Practices and Challenges in U.S. Counties

Accounting policies in the public sector: Characteristics and consequences of accounting for capital assets

Maintaining maintenance: The real effects of financial reporting for infrastructure

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