Chap017-baker 8

Chap017-baker 8 - receivable with a credit to a deferred...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 17 - Governmental Entities: Introduction and General Fund Accounting 17-8 C17-3 (continued) d. Under GASB 33 , this is an example of a voluntary nonexchange transaction unless the payment is the result of a government-mandated program. The asset will be recorded (receivable or cash) when all eligibility requirements are met or resources are received, whichever is first. Eligibility requirements are those established by the provider and may state requirements for specific allowable costs or specify a time requirement. Revenue will be recorded when all the eligibility requirements are met. On the modified accrual basis, revenues would be recorded when all eligibility requirements are met and the resources are available. e. Interest earned on investments is recognized as a receivable in the period in which it is accrued but not yet received. But interest is not recognized as revenue until it is considered available to liquidate liabilities of the current period. Thus, interest may be accrued to a
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: receivable with a credit to a deferred revenue in the period prior to the actual collection of the interest. In addition, the city should make an adjusting journal entry at each balance sheet date to recognize any adjustments required for changes in the fair value of the investments. Investment earnings are reported in the revenues section of the operating statement. f. GASB 33 specifies that this voluntary nonexchange transaction, with its time restriction and eligibility requirements, should be recorded as an asset when the applicable eligibility requirements are met or the resources are received, whichever is first. Under the modified accrual basis of accounting, revenues should be recognized when all applicable eligibility requirements are met and the resources are available. Prior to that, the community may recognize a credit for deferred revenues if the resources have been received....
View Full Document

This note was uploaded on 10/09/2011 for the course ACC 253 taught by Professor Strimling during the Fall '11 term at Harper.

Ask a homework question - tutors are online