How are capital assets treated in the government-wide financial statements?

In government-wide financial statements, capital assets are included as assets. This treatment reflects the overall financial position of the government, where capital assets such as buildings, infrastructure, and equipment are recognized and reported at their historical cost, net of accumulated depreciation. Including capital assets in these financial statements provides stakeholders with a complete view of the government's resources and capabilities.

By reporting capital assets, governments demonstrate their investment in long-term resources that are essential for delivering services to the public. This inclusion allows for a more accurate assessment of the entity's net position and financial health. The recognition of these assets aligns with the accrual basis of accounting used in government-wide financial reporting, which captures the current value of resources available to the government, thus providing a clearer picture of the financial implications of government operations over time.