Exam 9: Advanced Topics for State and Local Governments

When accounting for defined benefit pensions, the net pension liability for employees of governmental activities is:

County governments are typically classified as special purpose governments.

Which of the following is not required for a special-purpose local government engaged in only fiduciary type activities?

GASB standards permit exercise of judgment when determining whether a government is general-purpose or special-purpose.

Assume a government makes a change in the terms of a pension increases benefits 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 fire protection district is an example of special-purpose local government.

What items make up Pension Expense under a defined benefit pension plan?

If the government is primarily or secondarily liable for the payment of debt principal and interest for a special assessment project:

Special-purpose governmental entities that are engaged in only a single governmental-type activity need only prepare the statements required for governmental fund basis financial statements.

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

Special-purpose governments that are engaged in both governmental and business-type activities are required to use the full reporting model including MD&A, government-wide and fund-basis statements, notes to the financial statements and RSI.

Which of the following is true regarding pension accounting and reporting?

Which of the following is not true regarding financial reporting of special-purpose entities?

What are the required parts of the annual financial reports for special-purpose governments engaged only in fiduciary-type activities?

Big City provides a defined benefit pension plan for employees of the city water department, an enterprise fund. Assume that the service cost component is $420,000, and interest on the pension liability is $380,000 for the year. Actual returns on plan assets for the year were $300,000 while the projected level of earnings on plan investments was $360,000. This difference is to be amortized over a 5 year period, beginning this year. Finally assume the City is amortizing a deferred inflow resulting from a change in plan assumptions from a prior year in the amount of $10,000 per year. Prepare journal entries to record annual pension expense for the enterprise fund.

Assume a government is a special-purpose government engaged in only one governmental activity. Which financial statements would be required?

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

Special-purpose governments that are engaged in both governmental and business-type activities are permitted to combine the fund and government-wide financial statements.

Special-purpose governments that are engaged in both governmental and business-type activities or in more than one governmental activity are required to include which items in its financial reporting?

Special-purpose governments that are engaged in more than one governmental activity are required to use the full reporting model including MD&A, government-wide and fund-basis statements, notes to the financial statements and RSI.