As Part of a Service Concession Arrangement with a Private

Multiple Choice

As part of a service concession arrangement with a private firm involving operation of a city car park, a government agrees to incur certain future maintenance costs. If the present value of the consideration paid and to be paid to the government exceeds the present value of the maintenance costs to be incurred by the government, how, if at all, should the government report the "gain"?

A) Immediate recognition of revenue.
B) Deferred inflow of resources, and recognize revenue in a systematic and rational manner over the term of the arrangement.
C) Current liability.
D) A gain should not be reported; only a loss.