Final answer:
The statement that infrastructure assets are never depreciated because of their long useful lives is not true. Governments can either depreciate infrastructure assets or maintain them at a certain condition level, expensing only significant upgrades or improvements.
Step-by-step explanation:
The statement that is not true regarding infrastructure assets is: 'Because they have such long useful lives, infrastructure assets are never depreciated.' This statement is incorrect because, while infrastructure assets such as roads, bridges, and water supply systems do have long useful lives, governmental accounting standards allow for the depreciation of these assets. However, governments have two options for handling infrastructure assets: they can either depreciate them over their estimated useful lives or adopt a modified approach where they maintain the assets at a certain condition level and expense only the additions and improvements.
Expenditures to add to or improve infrastructure assets indeed must be capitalized, as this enhances the value and extends the useful life of the assets. This is common in the management of public investments where cost-efficiency can be a challenge, especially when political factors influence spending and investment decisions in physical capital. The appropriateness and effectiveness of infrastructure investment are influenced not only by economic factors but also by political considerations, which can lead to either excess spending in certain areas or underinvestment in others.