[ColoradoCPA]

Could please somebody explain the answers to the questions below?

1. In the Fund-Based Statements, how would a governmental unit record the donation of a Van Gogh painting for display in City Hall?

answer: Don’t record the painting at all.

2. If Dayglow, a midwestern town, receives a priceless Van Gogh painting for display in the town hall, how should the gift be recorded?

answer: for government-wide financial statements, a credit is made to a Revenue account

Thank you so much for your help!!!!

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[Anonymous]

Government-wide financial statements work more like a business, so for those, the Van Gogh painting increases the total worth of the government, hence it is revenue. For fund-based, it's more like an accounting for how resources were used. A Van Gogh painting which isn't going to be sold won't be used in any way, so there's nothing to account for. Fund-based is kinda more like cash-basis accounting. That's about the best I can give you – government accounting is way too confusing!!

[Anonymous]

Government-wide financial statements work more like a business, so for those, the Van Gogh painting increases the total worth of the government, hence it is revenue. For fund-based, it's more like an accounting for how resources were used. A Van Gogh painting which isn't going to be sold won't be used in any way, so there's nothing to account for. Fund-based is kinda more like cash-basis accounting. That's about the best I can give you – government accounting is way too confusing!!

[ColoradoCPA]

Thank you, Lilla!

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[ColoradoCPA]

Thank you, Lilla!

FAR 81 ✓
AUD 97 ✓
BEC 75 ✓
REG 84 ✓

[Author]

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