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Unformatted text preview: CHAPTER 5: ACCOUNTING FOR GENERAL CAPITAL ASSETS AND CAPITAL PROJECTS OUTLINE Number Topic Type/Task Status (re: 13/e) Questions: 5-1 Distinguishing general capital assets from fund capital assets Describe New 5-2 Capital asset disclosures Explain New 5-3 Modified approach for infrastructure Describe New 5-4 Capital lease accounting Describe 5-8 revised 5-5 Asset impairment Explain New 5-6 Use of capital projects funds Explain 5-4 revised 5-7 Encumbrances Explain Same 5-8 Construction work in progress Explain New 5-9 Multiple capital projects Explain Same 5-10 Special assessment capital projects Explain New Cases: 5-1 Modified approach for infrastructure assets Evaluate, write 5-2 5-2 Options for financing public infrastructure Evaluate, explain New 5-3 Political versus economic factors in financing capital improvements Evaluate, explain 5-1 retitled Exercises/Problems: 5-1 Examine the CAFR Examine 5-1 revised 5-2 Various Multiple Choice 5-2 revised 5-3 General capital assets Journal Entries Same 5-4 Capital asset disclosure statement Financial Statement 5-4 revised 5-5 Lease classification and accounting Calculate; JEs New 5-6 Asset impairment JEs; Reporting New 5-7 Special assessment financing JEs and Explain 5-6 revised 5-8 Statement of revenues and expenditures Compute; FS 5-5 5-9 Construction fund JEs & FS 5-7 revised 5-10 Capital project transactions JEs & FS 5-8 revised 5-1 CHAPTER 5: ACCOUNTING FOR GENERAL CAPITAL ASSETS AND CAPITAL PROJECTS Answers to Questions 5-1. General capital assets are those that are acquired with the resources of governmental funds and that are reported only in the Governmental Activities column of the government-wide financial statements. Capital assets acquired with the resources of proprietary or fiduciary funds are reported in the financial statements of those funds, as well as in the Business-type Activities column of the government-wide financial statements for enterprise fund capital assets. 5-2. Capital asset disclosures required by the GASB are quite well illustrated by the City and County of Denvers capital asset disclosures shown in Illustration 5-2. In brief, the disclosures should include policies for capitalizing assets and for estimating the useful lives of depreciable assets. In addition, the disclosures should include: (1) beginning-of- year and end-of-year balances showing accumulated depreciation separate from historical cost, (2) capital acquisitions during the year, (3) sales or other dispositions during the year, (4) depreciation expense showing amounts charged to each function in the statement of activities, and (5) disclosures regarding collections of art or historical treasures. 5-3. The modified approach permits a government an alternative to depreciation of certain eligible infrastructure assets. Eligible assets are parts of major networks of infrastructure assets or subsystems of networks, where a network might be a highway system, for example. If the government meets two requirements it can avoid reporting depreciation...
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- Spring '10