In the construction of a road is contracted out, the cost is defined by the contract. If a new road is built or a road is upgraded using internal labor and materials and some contract work, then materials, labor and machine hours will need to be accumulated and historic cost capitalized. It needs to be remembered that the changes in accounting and reporting that promulgated by GASB 34 will not immediately change the existing budgetary system. For the most part for several years counties will continue to use the modified accrual method of accounting in developing their annual budget. There are some instances that will require special accounting procedures related to the hot-check funds monitored by the county attorney and the district attorney.
Depreciation is to follow the assets.
The depreciation method that the county uses can any one of many. No the Clint Eastwood method is available any which way but loose.