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Unformatted text preview: 8-4 a. According to GASB statement 34 infrastructure is described as, "long-lived capital assets that normally are stationary in nature and normally can be preserved for a significantly greater number of years than most capital assets. Examples of infrastructure assets include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems". b. The two methods to record infrastructure expense are normal depreciation or the modified method. With the normal depreciation method, infrastructure would be depreciated the same as any other fixed asset and the depreciation expense would be recorded each year. With the modified method depreciation is not recorded, the only infrastructure expenses are the amounts spent to extend the life of the infrastructure. c. To use the modified method to record and report infrastructure the government must keep an up to date inventory of infrastructure assets. The government must also perform assessments every three years to determine the condition of the infrastructure assets and come up with annual estimates on the cost of maintaining these assets. The government is also required to record that infrastructure assets are being maintained. d. If the modified method is used additional disclosures are required. A disclosure must be included that reports the assesed condition of each infrastructure asset. The other required disclosure would report the annual estimated cost to maintain each infrastructure asset and compare it to the actual amount that was expended for each of the five preceding fiscal periods. 8-5 1. Governmental fund statements utilize the current financial resources measurement focus and the modified accrual basis. The proprietary fund, fiduciary fund, and government-wide statements all use the economic resource measurement focus and the accrual basis of accounting. 2. Government-wide statements include a presentation of component units where as fund financial statements do not. Fiduciary funds are included on the fund financial statements but not on the government-wide statements. Fund financial statements report internal service funds on the statement of net assets and the statement of revenues, expenses and changes in fund net assets. The government-wide statements usually report internal service funds as governmental, not business type activities. 3. The Invested in Capital Assets, Net of Related Debt category should include capital assets less depreciation and debt associated with acquisition. The restricted category includes net assets that are externally imposed by creditors and those imposed by law through constitutional provisions. The unrestricted category includes any other net assets that were not reported in the previous two categories. This amount can be calculated by subtracting the amounts of the previous categories from the total net assets. 9-2 a. Governments engaged in governmental and business type activities as well as those engaged in more than one governmental activity are required to follow the same reporting as general purpose local governments. The basic financial statements required are: the Government-Wide Statement of Net Assets and Statement of Activities and the Governmental Funds Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balances. If the government only engages in one governmental actitivity it can combine the Government-Wide Statement of Net Assets and the Governmental Funds Balance Sheet and the Government-Wide Statement of Activities with the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances. b. Governments engaged in only business-type activities are required to prepare: the Proprietary Funds Statement of Net Assets, Statement of Revenues, Expenses, and Changes in Fund Net Assets, and Statement of Cash Flows. c. Governments engaged in only fiduciary-type activities are required to prepare: the Fiduciary Funds Statement of Net Assets and Statement of Changes in Fiduciary Net Assets. ...
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This note was uploaded on 08/14/2011 for the course ACC 380 taught by Professor Any during the Spring '11 term at Ashford University.
- Spring '11