When two Asset Registers becomes a Structural Risk

In a genuine effort to keep pace with evolving requirements, an unexpected trend is emerging in asset management: the rise of two separate asset registers.

Ontario municipalities are building one dataset to support Asset Management Plans in compliance with O.Reg 588/17, and a separate for audited year-end financial statements under PSAB 3150. The first supports lifecycle forecasting, levels of service, and long-term financial sustainability. The other is focused on historical cost, amortization, and tangible capital asset reporting.

At the outset, the separation may seem pragmatic – the reporting purposes are different, the cost bases are different. The needs are different too: engineering needs componentization and replacement cost, while finance needs capitalization thresholds, historical cost, and amortization schedules. Asset owners may even be humming along with different software.

Trying to force these into one structure can feel messy, especially when systems were not designed to speak to each other. But over time, the two-register solution can lead to even greater problems. Let’s talk about it.

Why It Seems Logical

At the heart of the issue, asset management and financial reporting have different data needs. Asset management focuses on replacement costs, condition, lifecycle forecasts, and funding gaps. Finance focuses on historical costs, amortization, and net book value. We cannot (and don’t need to) make changes to how the two groups use the data. But the risks start growing when the asset data and underlying data structures diverge.

The most obvious early warning sign is when assets are disposed in one system and not in another. Another common one is variations in asset useful life: engineering is blissfully unaware of regulated amortization periods, while finance regularly sees assets in use that have a zero-dollar book value. These are just symptoms of how separate registers begin leading to data fragmentation.

Separate systems may be built on different hierarchies (e.g. a pump is a water asset vs. a pump is an equipment asset) and see assets componentized differently:

·       A building is one asset to finance, amortized over 40 years

·       Structure, HVAC, plumbing, and shell are four separate assets to engineering with their own maintenance and replacement schedules

In the two register system, reconciliation becomes an annual exercise. The risk is not just extra work, it is the gradual loss of traceability. When lifecycle forecasts do not reconcile to financial history, credibility in the forecasting erodes. When auditors begin asking how the Asset Management Plan connects to financial reporting, the explanation starts to rely on spreadsheets and caveats.

Two registers create two narratives about the same infrastructure. Over time, the gap between them will widen unless it is actively managed.

While not necessarily on two computers, separate datasets can lead toward a yawning gap in data covering a single set of assets.

The Structural Risk

Most municipalities can technically comply with O.Reg 588/17 and PSAB 3150 using separate datasets. The risks of data divergence, the extra work to maintain two datasets, the lack of alignment between historical reporting and forward financial planning, and the need to constantly monitor and reconcile make this a cumbersome solution in the long-term.

As asset management practice matures, staff should be able to provide, and Council members should expect, alignment between:

·      Replacement forecasts and reserve strategy

·      Lifecycle investment needs and net book values

·      Operational risks and fiscal consequences

If those relationships cannot be demonstrated, asset management remains operationally useful but financially abstract. Capital planning becomes harder to defend, and long-term funding strategies become less persuasive. In this way, separation solves a short-term systems problem but introduces a long-term governance problem.

The Alternative: One Dataset, Multiple Lenses

A more durable model is to maintain a single integrated asset dataset, with selective call-outs for financial reporting. That does not mean forcing engineering and finance into identical structures, but it calls for an intentional data architecture.

In practice, this looks like:

·      One authoritative asset ID and hierarchy

·      Financial attributes stored as fields within the same asset records

·      Defined modules for lifecycle needs and condition analysis

·      Clear flags for capitalization and reporting requirements

·      Defined roll-ups from component level to financial reporting level

Not every asset in the AM universe needs to appear in audited statements. Small culverts, minor facility components, or certain natural assets may fall below capitalization thresholds. Rather than excluding them from the core dataset, they can simply be flagged as “non-capitalized” for financial reporting purposes.

Finance can extract a PSAB-compliant view. Engineering can extract a lifecycle planning view. Council and other staff can see one asset universe. The key is that the reporting outputs differ, not the backbone data.

Making It Happen

This is not purely a technical fix, and it is not solved by asking engineering and finance to “work better together.” Like much in asset management, it requires a cross-functional coalition:

·      Engineering / Public Works, who understand condition, risk, and componentization

·      Finance, who define capitalization thresholds and amortization policy

·      IT or systems architecture, who understand integration constraints

·      Asset management leadership, who see the whole lifecycle picture

·      Senior administration, who can mandate structural alignment

The conversation must move beyond reconciliation and toward architecture. Asset IDs should be treated as enterprise data, not departmental property. Capitalization thresholds should be understood as separate but related to lifecycle forecasting. Useful life assumptions should be discussed jointly.

None of this requires abandoning existing systems: phased integration with mapping tables can reconcile AM structures with financial reports. The important shift is conceptual: infrastructure exists once, and reporting draws from it.

A Forward Look

As asset management maturity increases across Canada, the expectations for alignment and traceability will grow. Councils, auditors, and regulators are increasingly literate in infrastructure finance. The ability to clearly connect lifecycle need to financial position will become a differentiator.

Maintaining two asset registers may feel efficient in the short term. In the long term, integration strengthens governance, credibility, and decision-making.

Asset management and financial reporting are not competing systems, rather, they are two lenses on the same infrastructure. The more clearly those lenses align, the sharper the municipal financial roadmap becomes.