Accounting for Governmental & Nonprofit Entities
17th Edition
ISBN: 9780078025822
Author: Jacqueline L. Reck James E. Rooks Distinguished Professor, Suzanne Lowensohn, Earl R Wilson
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 5, Problem 16.6EP
To determine
Identify the statement true in regards to modified approach for accounting the infrastructure assets.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Under GASB Statement No. 34, which of the following is true of infrastructure?a. Infrastructure must be recorded and depreciated unless a modified approach is used, in which case, depreciation is not required.b. Infrastructure must be recorded and depreciated in all cases.c. Infrastructure is not to be recorded and depreciated.d. The state and local governments have the option, but are not required, to record and depreciate infrastructure.
Which of the following is true about use of the modified approach?
It can be applied to all capital assets of a state or local government.
It is used to adjust depreciation expense either up or down based on conditions for the period.
It is required for infrastructure assets.
For qualified assets, it eliminates the recording of depreciation.
FASB recently issued a Proposed Accounting Standard Update on impairment for intangible assets. What is the primary purpose for FASB to issue Proposed Accounting Standards Updates?
Chapter 5 Solutions
Accounting for Governmental & Nonprofit Entities
Ch. 5 - What are general capital assets? How are they...Ch. 5 - Prob. 2QCh. 5 - Prob. 3QCh. 5 - Prob. 4QCh. 5 - Prob. 5QCh. 5 - What is the accounting difference between using...Ch. 5 - Prob. 7QCh. 5 - Prob. 8QCh. 5 - Prob. 9QCh. 5 - What is a service concession arrangement, and why...
Ch. 5 - Prob. 12CCh. 5 - Prob. 13CCh. 5 - Prob. 14CCh. 5 - Under GASB standards, which of the following would...Ch. 5 - Two new copiers were purchased for use by the city...Ch. 5 - Maxim County just completed construction of a new...Ch. 5 - A capital projects fund would probably not be used...Ch. 5 - Prob. 16.5EPCh. 5 - Prob. 16.6EPCh. 5 - Prob. 16.7EPCh. 5 - Callaway County issued 10,000,000 in bonds at 101...Ch. 5 - Prob. 16.9EPCh. 5 - Prob. 16.10EPCh. 5 - Prob. 17EPCh. 5 - Prob. 18EPCh. 5 - Prob. 19EPCh. 5 - Prob. 20EPCh. 5 - Prob. 21EPCh. 5 - Prob. 22EPCh. 5 - Prob. 23EPCh. 5 - Prob. 24EP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- 1. What is the accounting difference between using the modified approach for infrastructure assets and depreciating infrastructure assets? Under the modified approach, what happens if infrastructure assets are not maintained at or above the established condition level? 2. What is a special assessment? How does funding for a special assessment capital improvement differ from other capital improvements in a local government?arrow_forwardAll of the following are true about the modified approach to infrastructure depreciation except: O If specific guidelines are met, a government can choose to expense all maintenance costs each year in lieu depreciation. The modified approach specifically excludes infrastructure assets within a network or subsystem of a netw O If specific guidelines are met, additions and improvements must be capitalized. For eligible assets, the government must establish a minimum acceptable condition level. O The government must have an asset management system in place to monitor the eligible assets. Question 18 The city operates a public swimming pool where each person is assessed a $2 entrance fee. Which statement is most appropriate to report these revenues?arrow_forwardAccess the FASB Accounting Standards Codification at the FASB website (asc.fasb.org). Determine the specific citation for each of the following items: 1. Depreciation involves a systematic and rational allocation of cost rather than a process of valuation. 2. The calculation of an impairment loss for property, plant, and equipment. 3. Accounting for a change in depreciation method. 4. Goodwill should not be amortized.arrow_forward
- According to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as sucharrow_forwardAccording to IAS 16 Property, Plant and Equipment, which, if any, of the following statements about depreciation are correct? The main purpose of depreciation is to reflect the fall in value of an asset over its useful life When an asset is revalued, subsequent depreciation relating to the amount of the revaluation should be debited to the revaluation surplus rather than to the income statement The provision for depreciation ensures that there are funds available to replace an asset when this becomes necessary, though in times of inflation, additional amounts may need to be set aside A change in depreciation method constitutes a change in accounting policy and must be accounted for as such A (1) and (4) B (2) and (3) C (4) only D None of the statements is correctarrow_forwardcompare and contrast the recording of fixed assets under US GAAP and IFRS How would you determine the impairment of fixed assets? Provide an appropriate numerical example to support your responsearrow_forward
- Directions: Read and analyze the following standards and answer what is required. Required: Write the definition, recognition, measurement and derecognition if any in the chart above provided for the following: Intangible assets Impairment of assets Investment property Agriculture Borrowing cost Government grantarrow_forwardWhich of the following is least likely capitalized as cost of land? Grading, filling, draining clearing and similar site development activities Survey Landscaping and similar improvements that have limited useful lives. Special assessment Subsequent to initial recognition, an entity shall use this model to account for its items of property, plant and equipment. cost model revaluation model fair value model Cost model or revaluation model as an accounting policy choice It is the systematic allocation of the depreciable amount of an asset over its estimated useful life. Depreciation Impairment Revaluation all of thesearrow_forwardMa1. d) In accordance with IAS 36: Impairment of Assets, an entity shall assess at the end of each reporting period whether there is any indication that an asset may be impaired. If any of such indications exist, the entity shall estimate the recoverable amount of the asset. However, some assets would require mandatory testing for impairment. Required: Outline assets that require mandatory testing for impairment in accordance with IAS 36: Impairment of Assets.arrow_forward
- Discuss with examples TWO (2) indicators that may require an entity to reduce the value of their assets in accordance to MFRS136 Impairment of Assets.arrow_forwardWrite the definition, recognition, measurement and derecognition if any provided for the following: Intangible assets Impairment of assets Investment property Agriculture Borrowing cost Government grantarrow_forwardIncluded in the requirements for an intangible asset arising from development (or from the development phase of an internal project) to be recognized, are the following except: multiple choice the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset the technical feasibility of completing the intangible asset so that it will be available for use or sale the legal right to deter others from using the intangible asset its ability to use or sell the intangible assetarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach (MindTap Course L...AccountingISBN:9781337619455Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:Cengage Learning
Auditing: A Risk Based-Approach (MindTap Course L...
Accounting
ISBN:9781337619455
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Cengage Learning