8

Question 1

Gov-wide FS should classify net assets as:

Answer 1

1. Net investment capital assets
2. Restricted
3. Unrestricted

Question 2

under the modified approach, what are reported as expenses except for outlays that result in additions or improvements, which would be capitalized?

Answer 2

Infrastructure expenditures

Question 3

How are capital lease obligations recorded in the gov-wide financial statements

Answer 3

Capital lease obligations associated with the general governmental activities are recorded as an asset and as a liability on the full accrual. Guvernment fund FS would record the asset financed as an expenditure and the lease financing as other financing sources under mod accrual..

Question 4

The statement of activities includes separately displayed categories of program revenue, such as:

Answer 4

services, operating grants and contributions, and capital grants and contributions.

Question 5

Government-wide financial statements must be divided into which categories:

Answer 5

governmental and business type activities

Question 6

non-exchange revenues in support of gov activities, such as taxes for improvement to roads, are classified as what on the gov-wide FS?

Answer 6

General revenues

Question 7

Which are the only securities that can be categorized as debt securities?

Answer 7

Bonds

Question 8

Under what value are bonds reported?

Answer 8

At the amortized cost

Question 9

Marketable securities are reported at what value?

Answer 9

at fair value

Question 10

When purchasing Land you may capitalize al costs up to what point?

Answer 10

up to the point of excavation.

Question 11

Rules for expensing and capitalizing when it comes to equipment:

Answer 11

Everything is capitalized except ordinary expenses.

Question 12

When to capitalize interest under SFAS 34.

Answer 12

choosing the smaller of the avoidable interest or the total interest.

Question 13

Rules for interest costs incurred during a the construction period of a machinery:

Answer 13

If used as a fixed asset, should be capitalized as part of the historic cost of acquiring the fixed asset. interest after construction and during routine manufacture of machinery for sale to customers should be expensed.

Question 14

Revaluation under IFRS (cost method) - Same as GAAP

Answer 14

NBV = Historical cost - Accumulated Depr - impairment

Question 15

Revaluation under IFRS (Re-valuation method) - IFRS Only

Answer 15

Need to be valued frequently
FV @ revaluation date - Subsequent accumulated depr. - subsequent impairment

If revaluation loss occurs, initial loss goes on the IS. If previously recorded gain is reversed, then this loss goes on OCI.

Initial gain is reported on OCI, unless reverse previously reported gain.

Question 16

costs related to purchasing land that should be capitalized are:

Answer 16

Any usual and necessary costs to clear and grade the land.

Question 17

Any goodwill created in an investment accounted for under the equity method should be:

Answer 17

ignored, as it is neither amortized or tested for impairment. The entire investment is subject to impairment test.

Question 18

Equity Accounting “BASE” Formula:

Answer 18

BEGINNING balance
ADD: Investors share of earnings (like: Bank interest)
SUBTRACT: Investors share of investees dividends
=Ending balance

Question 19

measurement focus of gov-type funds is on the determination of:

Answer 19

Current financial resources and financial position

Question 20

Gov funds could contan funds using what type(s) of accounting basis:

Answer 20

Modified accrual (governmental funds and accrual (proprietary and fiduciary funds)