Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 17, Problem 17.1.8P
To determine
Introduction: The GASB is the board that provides the guideline to the governmental units about proper accounting of transactions. As per GASB, the accounting for funds of a governmental unit is different from that of private units.
To select: The correct option.
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Which of the following is true about use of the modified approach? Choose the correct.a. It can be applied to all capital assets of a state or local government.b. It is used to adjust depreciation expense either up or down based on conditions for the period.c. It is required for infrastructure assets.d. For qualified assets, it eliminates the recording of depreciation.
All 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?
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?
Chapter 17 Solutions
Advanced Accounting
Ch. 17 - Prob. 1UTICh. 17 - Prob. 2UTICh. 17 - Prob. 3UTICh. 17 - Prob. 4UTICh. 17 - Prob. 5UTICh. 17 - Prob. 6UTICh. 17 - Prob. 4.1ECh. 17 - Prob. 4.2ECh. 17 - Prob. 4.3ECh. 17 - Prob. 4.4E
Ch. 17 - Prob. 4.5ECh. 17 - Prob. 4.6ECh. 17 - Prob. 4.7ECh. 17 - Prob. 4.8ECh. 17 - Prob. 4.9ECh. 17 - Prob. 4.10ECh. 17 - Prob. 5ECh. 17 - Prob. 6.1ECh. 17 - Prob. 6.2ECh. 17 - Prob. 6.3ECh. 17 - Prob. 6.4ECh. 17 - Prob. 6.5ECh. 17 - Prob. 6.6ECh. 17 - Prob. 7ECh. 17 - Prob. 17.1.1PCh. 17 - Prob. 17.1.2PCh. 17 - Prob. 17.1.3PCh. 17 - Prob. 17.1.4PCh. 17 - Prob. 17.1.5PCh. 17 - Prob. 17.1.6PCh. 17 - Prob. 17.1.7PCh. 17 - Prob. 17.1.8PCh. 17 - Prob. 17.1.9PCh. 17 - Prob. 17.1.10PCh. 17 - Prob. 17.1.11PCh. 17 - Prob. 17.1.12PCh. 17 - Prob. 17.3PCh. 17 - Prob. 17.4PCh. 17 - Prob. 17.5PCh. 17 - Prob. 17.7PCh. 17 - Prob. 17.8PCh. 17 - Prob. 17.9PCh. 17 - Prob. 17.11.1PCh. 17 - Prob. 17.11.2PCh. 17 - Prob. 17.11.3PCh. 17 - Prob. 17.12.1PCh. 17 - Prob. 17.12.2P
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- 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.arrow_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_forwardDirections: 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_forward
- Included 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_forwardWhich of the following statements is correct? a. Both IFRS and GAAP permit revaluation of property, plant, and equipment. b. IFRS permits revaluation of property, plant, and equipment but not GAAP. c. Both IFRS and GAAP do not permit revaluation of property, plant, and equipment. d. GAAP permits revaluation of property, plant, and equipment but not IFRS.arrow_forwardAccording to the IPSASB's Conceptual Framework, how would you define an "asset"? Please select the right answer. Sorry, your answer was not correct! A resource owned by a public sector entity as a result of past events and from which future economic benefits are expected to flow to the enterprise A resource presently controlled by a public sector entity as a result of past events A resource owned and controlled by a public sector entity as a result of past events and from which service potential is generated None of the abovearrow_forward
- Statement 1: In website development, application and infrastructure, graphical design and content development are always charged to expense.Statement 2: If an entity cannot distinguish the research phase from the development phase of an internal project to create an intangible asset, the entity treats the expenditure on that project as if it were incurred in the research phase only. Group of answer choices Both statements are true. Only statement 1 is true. Both statements are false. Only statement 2 is true.arrow_forwardIf an entity wishes to change from a cost model to fair value model under IAS 40 – Investment Property, when may it do so? Select one: a. When the market for these properties is fluctuation b. When the board of directors approves a change c. When the value of the assets will improve with a revised model d. When a change will result in a more appropriate presentationarrow_forwardWhich statement is correct regarding the treatment of research costs in accordance with IAS 38 intangible assets? Select one alternative: Research costs may be deferred if costs can be measured reliably. Research costs may not be deferred unless it is almost certain that the project they are applied to will bring future economic benefits and costs can be measured reliably. Research costs may not be recorded as an intangible asset and thus the cost is expensed in the period it is incurred. Research costs can be deferred (recorded as an asset) when it is probable that the project they are applied to will bring future economic benefits.arrow_forward
- Which of the following statements relating to the accounting for research and development expenditure under IAS 38 is CORRECT? (i) All expenditure on research should be written off in the year incurred.(ii) All expenditure on development should be written off in the year incurred.(iii) Expenditure on research which satisfies all stipulated conditions can be capitalised.(iv) Expenditure on development which satisfies all stipulated conditions can be capitalised. Question 8 options: 1) Statements (i) & (ii) only. 2) Statements (iii) & (iv) only. 3) Statements (i) & (iv) only. 4) Statements (ii) & (iii) only.arrow_forwardAccording to IAS 38 Intangible Assets, which of the following conditions would preclude any part of the development expenditure from being capitalized as an intangible asset? A The development is incomplete B The benefits flowing from the completed development are expected to be at least equal to its cost C Funds are unlikely to be available to complete the development D The development is expected to give rise to more than one productarrow_forwardWhich of the following statements is correct? Question 1 options: a Some intangible assets have physical substance b Intangible assets are always classified as noncurrent assets even in cases where they are part of a disposal group. c The process of recording the expiration of the economic benefits of an intangible asset is called depletion. d Intangible assets can be obtained in one of two ways – external acquisition or internal developmentarrow_forward
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