If a Government Elects the Modified Approach with Regard to Capitalization

question 10

Multiple Choice

If a government elects the modified approach with regard to capitalization of infrastructure

• A)Costs to preserve infrastructure assets are expensed as incurred with no additional disclosure required.
• B)Costs to preserve infrastructure assets are expensed as incurred and disclosure of assessed condition is required.
• C)Costs to preserve infrastructure assets are capitalized as incurred and depreciated over the estimated useful with no additional disclosure required.
• D)Costs to preserve infrastructure assets are capitalized as incurred and NOT depreciated over the estimated useful life with additional disclosure required.

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Definitions:

Floating Lien

A lien on a debtor's assets that changes over time with the inventory levels or changes in collateral included under the lien.

Purchase-Money Security Interest

A legal claim or lien that grants the lender a security interest in the item being purchased, as collateral for the loan.

Right of Redemption

A debtor's legal right to reclaim property that has been foreclosed upon or repossessed by paying off debt, usually within a specific period.

Continuation Statement

A statement that, if filed within six months prior to the expiration date of the original financing statement, continues the perfection of the original security interest for another five years. The perfection of a security interest can be continued in the same manner indefinitely.