GASB Reporting Standards Require That Legally Separate Component Units Be

question 58

Essay

GASB reporting standards require that legally separate component units be included on the face of the financial statements of the primary government. Small City created a legally separate City Utility Service. The Small City council appoints the utility board members, authorizes the bonds of the utility, and approves its budget. Small City's general fund revenues are $58 million; the revenues of the utility are $100 million (the utility owns a generating plant and sells its excess power to other communities). Discuss the appropriate reporting for the City Utility Service. Do you think that this presentation is meaningful? Why or why not?

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Definitions:

Aplysia

A genus of sea slugs known for their utility in neurobiological studies, especially in understanding the fundamentals of learning and memory.

Physical Basis

The underlying material or biological foundation for a phenomenon or condition.

Long-Term Potentiation

An enduring increase in signal transmission between neurons that results from stimulating them simultaneously, believed to be a mechanism behind learning and memory.

Learning

The process of acquiring new understanding, knowledge, behaviors, skills, values, or preferences through study, experience, or teaching.