Exam 9: Advanced Topics for State and Local Governments

Public colleges and universities that choose to report as special-purpose entities engaged only in business-type activities would have which of the following financial statements?

The projected returns exceed actual returns on pension plan assets for a government offering a defined benefit pension plan. How would the resulting increase in the net pension liability be recognized in the financial statements in the year this difference is recognized?

Which of the following lease criteria would not qualify a lease as a capital lease?

Indicate the financial reporting rules for each of the following special-purpose entities which category of special-purpose entity), and indicate the financial statements that would be required: a. A township that assesses property for taxation, provides road maintenance, and provides welfare assistance. b. A fire protection district that engages in protection of property in unincorporated areas from fires. c. An independent tollway authority, not the component unit of any other government. d. An independent statewide pension plan. e. A public college.

What is the difference between a component unit and a special purpose local government?

Special-purpose governments generally provide a limited set of services or programs.

A government offering a defined benefit pension plan changes the plan terms with the result that pension benefit are increased. How would the resulting increase in the net pension liability be recognized in the financial statements in the year the plan is changed?

Assume a government makes a change of assumption that results in an increase in its estimate of the net pension liability. The resulting change in the net pension liability will be recorded as pension expense in the period of the change.

A special assessment tax is a tax levy that is assessed against only those taxpayers who are deemed to benefit from the service or project paid for by the proceeds of the special assessment levy.

The central issue in evaluating a special-purpose entity is what set of financial statements fund-basis alone or fund-basis with government-wide) are required.

Which of the following would not be considered a special-purpose government for financial reporting purposes?

Capital assets leased through capital by the General Fund are reported in the government-wide Statement of Net Position

Financial reporting for a special-purpose local government depends on whether that government is engaged in governmental-type, business-type or fiduciary-type activities.

Special-purpose governments generally provide a single or limited set of governmental services or programs.

Where is the net pension liability shown in a Comprehensive Annual Financial Report for employees of enterprise fund activities?

So long as the reporting government is not primarily responsible for debt under a construction type special assessment, the special assessment may be reported in an Agency Fund.

Which of the following local governments is least likely to report a net pension liability for underfunded pension obligations?

Pension expenditures for governmental type funds are equal to the amounts paid to the pension fund for current year service plus any accruals for amounts to be paid from current financial resources.

Which of the following is true regarding fiduciary funds?

Special purpose governments engaged only in fiduciary-type activities are required to prepare all of the following except: