What capital figures record, and what they leave elsewhere
Gross fixed capital formation records the fixed assets acquired in a year, less disposals; in plain terms, investment spending. It does not measure what an asset is worth, what has been completed or what has entered service. Across the asset's lifecycle, its operation, maintenance, information, replacement and eventual disposal are governed and recorded under different rules, in budgets, registers, contracts and accounting records. What the figures show, what they cannot show, and where to look for the rest.
A national accounts table can say, with some precision, how much a country spent on fixed assets in a year. It cannot say what those assets are now worth, how many of them are finished, or which of them are in service. Those are different questions, and the figures that answer them, where any do, sit in other records.
This note sets out what the capital figure measures, where the obligations of an operating asset are recorded instead, and what the published data in the Gulf does not establish.
What capital formation measures
Gross fixed capital formation, GFCF in the national accounts, is the value of fixed assets acquired in a period, less those disposed of. It covers every kind of fixed asset: buildings, roads, networks, plant, machinery and more. It is a flow. It adds up the acquisitions of a year, less disposals, and it can be recorded while a structure is still being built.
So it is not the value of the asset base, which is a stock. It is not construction output, because it includes machinery and equipment as well as structures. It is not completion, commissioning or the date an asset entered operation, because the acquisition is recorded as it happens, whether or not anything has been handed over.
The scale is still worth knowing. Summed from the United Nations National Accounts Main Aggregates Database, gross fixed capital formation in the six Gulf Cooperation Council states came to about US$3.82tn in constant 2020 dollars over 2016 to 2024. That total is calculated here from the UN's country series, and it is a flow over nine years: investment spending, in plain terms. It is not the value of what those countries own, and it does not say how much of it has become an asset in service.
Gross and net
The word gross matters. GFCF is recorded before any deduction for the capital used up in the same period. The national accounts estimate that separately as consumption of fixed capital, and subtracting it gives net capital formation.
Saudi Arabia's General Authority for Statistics reports GFCF of SAR 1,441bn for 2024 and consumption of fixed capital equal to 8.8% of GDP, which it gives as SAR 4,703bn. On those two published figures, net fixed capital formation was roughly SAR 1.03tn, calculated here. Consumption of fixed capital is a statistical estimate of wear and obsolescence. It is not maintenance spending, it is not the cost of renewal, and it is not a budget line anybody pays.
Available for use: the accounting trigger
A capital project accumulates cost in a holding account, work in progress or projects under execution, until the asset is ready. The transfer out of that account has a date, and it is the date depreciation starts. It is not a common start date for everything else the asset brings with it.
Those are the rules Saudi government entities apply under the Ministry of Finance's accrual programme, and they follow IPSAS 45. Three things follow from them.
Available for use is an accounting trigger. The standard tests whether the asset is in the location and condition needed to operate as management intends. That is related to operational readiness and is not the same question: an asset can be capable of operating before the people, contracts, spares and information needed to run it are in place.
How the transfer date is chosen, and why the certificate usually wins
, read: The date a project becomes an asset is not the date on the certificateServicing and replacement are recorded differently. Routine maintenance goes to expense in the year. A qualifying replacement goes back into the asset's value, and the old part comes out. The same physical activity on the same asset can therefore appear in two places, depending on what was done.
And recognition runs until disposal. The asset stays in the accounts until it is disposed of or has nothing left to give.
Where the obligations are recorded
Put those rules beside the budget, the register and the contract, and one asset appears in several records, each governed by its own rule. The records do not share a start date. Asset information, contracts and operational preparation may begin before the asset is available for use; operation and maintenance depend on the operating arrangement; replacement and disposal normally come later.
Seven rows mapping lifecycle matters to the records that carry them and the rules that govern them. The first is capital formation, recorded in national accounts and capital budgets. The second is the accounting trigger, available for use, at which depreciation begins. The other five are operation, maintenance, replacement, asset information and disposal, each recorded in a different place under a different rule; they do not share a single start date. Paragraph references are to the Saudi Public Sector Accounting Standard 45.
One asset across its lifecycle · matters · records · rules
| Lifecycle matter | Where it is recorded | What puts it there |
|---|---|---|
| Capital formation | National accounts (GFCF); capital budgets | Fixed assets acquired in the year less disposals, gross: before deducting consumption of fixed capital |
| Available for use | Accounting records | Accounting trigger: depreciation begins (AG27); useful life and residual value reviewed at least annually (para 48) |
| Operation | Current or recurrent budgets; operating contracts | Budget classification and contract terms |
| Maintenance | Current budgets; in Kuwait’s 2025/26 budget, a capital group as well | Routine servicing is an expense as incurred (AG13) |
| Replacement | Fixed-asset register; capital budgets | A qualifying replacement is capitalised and the replaced part derecognised (AG14) |
| Asset information | Fixed-asset registers; contracts; information standards | The register supports accounting recognition and control; information requirements apply where contracted |
| Disposal | Accounting records | Recognition ends on disposal or when no service potential remains (paras 62 and 63) |
Available for use is the accounting trigger for depreciation under PSAS 45. The other rows do not share a single start date; they identify the records and rules that carry different matters across the asset lifecycle. The Kuwait entry shows one classification; it is not a benchmark for the others.
None of this is a gap in any one system. Each record does its own job: the national accounts measure the economy, the budget authorises spending, the register supports the accounts, and the contract binds the operator. None of the records described here carries an asset from its cost to its obligations.
That is also how international guidance frames it. The OECD's 2020 Recommendation on the Governance of Infrastructure asks governments to report annual and multi-annual spending on new infrastructure together with spending on the maintenance, renovation, adaptation and decommissioning of existing assets.
Maintenance in six budgets
Whether maintenance appears as its own line depends on how a budget is classified. The published documents read for this note differ, and each statement below is confined to the pages named.
Kuwait's budget for 2025/26 records maintenance in two places. Within goods and services, a current chapter, item 2223 is maintenance, at KD 234m. Within the purchase of non-current assets, a capital chapter, group 327 covers construction projects and maintenance, and its maintenance lines total KD 606m. That is one classification, shown as an example of maintenance appearing in both current and capital records. It is not a benchmark, and appropriations are not spending.
In the other five documents read, maintenance is not isolated as a separate line at the level shown:
- Saudi Arabia. The fiscal tables on pages 34 and 43 of the Budget Statement for FY2026 present goods and services and capital expenditure.
- Oman. The tables of the 2025 state budget separate current from investment expenditure.
- Bahrain. The tables of the 2025 and 2026 budget law classify recurrent and project expenditure by ministry and entity.
- United Arab Emirates. The federal budget yearbook for 2026 groups federal spending into four economic categories. It names maintenance as one reason commodity and service supplies rose to AED 19.08bn. Emirate budgets are separate and were not reviewed.
- Qatar. The 2025 public budget statement presents expenditure in four chapters: salaries and wages, current expenditure, minor capital expenditure and major projects. Maintenance appears inside some project descriptions.
A line that is not isolated is not a cost that is not paid. Maintenance can sit inside goods and services, inside a ministry's recurrent allocation or inside a project, and the published tables are summaries. Nothing here shows neglect or underfunding.
What the figures do not establish
The capital figure, the budget tables and the accounting rules together leave several questions open. On the published sources read for this note, none of these can be stated for the Gulf:
- an operating cost burden for the region or any country in it;
- a maintenance funding gap;
- deferred maintenance totals;
- a required renewal total;
- a gap in the operations and maintenance workforce;
- the value or number of assets that have entered service in a period;
- a rate at which obligations are accumulating.
Each would need data that the capital figure cannot supply: an asset inventory by class and condition, maintenance spending by entity and a documented method for estimating what maintenance is required.
The registers a Saudi public entity is asked to hold, and what each records
, read: An entity is asked for four asset registers and builds oneWhat to ask of a capital figure
- Is this a flow of spending or a stock of assets, and in current or constant prices?
- Is it gross or net of consumption of fixed capital?
- Which record holds the date each asset became available for use?
- Where does this organisation record routine maintenance, and where does it record replacement?
- Which register and which contracts carry the asset's information once the project team has gone?
- Where will disposal and site restoration be recorded, and by whom?
Sources. United Nations Statistics Division, National Accounts Main Aggregates Database, gross fixed capital formation in constant 2020 US dollars for Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain, 2016 to 2024, read on 28 September 2026; the total is the sum of the six series, calculated by Projects Advisors. General Authority for Statistics, Annual National Accounts Publication 2024, pages 1 and 2, for GDP, GFCF and consumption of fixed capital.
Ministry of Finance, Kingdom of Saudi Arabia, Public Sector Accounting Standard 45, Property, Plant and Equipment, 2024 edition, published in Arabic and English, paragraphs 48, 62 and 63 and application guidance AG13, AG14 and AG27. It follows IPSAS 45.
Kuwait Ministry of Finance, State Budget 2025/2026, chapter 22, item 2223, and chapter 32, group 327. Saudi Ministry of Finance, Budget Statement FY2026, pages 34 and 43. Oman Ministry of Finance, State's General Budget for Fiscal Year 2025, tables. Bahrain Ministry of Finance and National Economy, tables of the state budget law for 2025 and 2026. UAE Ministry of Finance, UAE Federal Budget Yearbook 2026, section 3.3. Qatar Ministry of Finance, Public Budget Statement 2025, expenditure by chapter.
OECD, Recommendation of the Council on the Governance of Infrastructure, OECD/LEGAL/0460, adopted 17 July 2020, section ii)a) and the definition of the life cycle of public infrastructure.
Read the sources
- IPSAS 45, property, plant and equipment2023, effective 1 January 2025; read 2026-09-01.Free in full, with its Basis for Conclusions in the same document. Replaced IPSAS 17 from 1 January 2025.
- Saudi Ministry of Finance, comprehensive manual for the census and valuation of assets of government entities, ArabicSecond edition, approved 10 September 2022; the rendering the Ministry hosts; read 2026-09-23.Free, in Arabic only. Section 5.2, pages 78 to 152, prints the classification of non-current assets with a capitalisation threshold and a minimum, maximum and default useful life for each asset type. Page 76 asks each entity to set its lives within the published range, taking account of the manufacturer, the use and the expected benefit, and to submit them to the central committee for approval. English asset names on this site are a Projects Advisors translation.
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