[Anonymous]

So I got this question on my Ninja MCQ tonight…

New Town has completed the conversion and consolidation process to prepare its government-wide financial statements. Fund balances of all governmental and enterprise funds have been adjusted to present net position for governmental activities and for business-like activities. A portion of the net position should be displayed as “net investment in capital assets,” at an amount calculated as:

I selected “D. the total of capital assets less depreciation and outstanding mortgages or bonds related to the assets.”

My answer was incorrect as option C was the correct answer “the total of capital assets less depreciation and outstanding mortgages or bonds reduced by any significant unspent proceeds.”

Here’s the explanation of the answer.. “The best answer calculates the displayed amount by considering capital assets reduced by depreciation and directly related debt. Any amount of significant unspent debt proceeds or deferred inflows should not be included in the calculation of “net investment in capital assets.” It would be displayed as “restricted” or “unrestricted” and reduced by that portion of the debt or deferred inflow. Not all long-term debt is directly associated with the capital assets.”

I feel like this is saying my answer should have been correct.. Are significant unspent proceeds included in the calculation of net investment in capital assets?

[elprezidente07]

What a terrible question and answer from the publisher. I think what it means is that the equity portion of the investment in capital assets should be directly to the debt necessary for the asset. Therefore, if you had a building that cost $2 million, and the debt taken out was 1.5 million, but 500k was used for unrelated purposes, it would not be appropriate to consider that 500k in the investment in capital assets.

AUD // F x2 P 92- (Test server crashed! It really does happen!)
REG // F, F, F, P - 75 Aug 2014
BEC // P - 80
FAR // F, F...now its time for my greatest trick yet.
Ethics // Very.

75 to stay alive

[Anonymous]

So, I will reduce the total debt related to the asset by any amount not directly spent on the asset (or not yet spent). That total will then be subtracted from the total capital assets??

[Mika]

Not meant to be discourage but it is over 20% of your exam will be govt (at least my exams is)

Do not trust the CSO

REG - 80 (02/13/2015) Roger + Ninja Flash Card + Ninja MCQ + Becker's Note
FAR - 84 (05/29/2015) Roger + Ninja MCQ + Some Wiley book questions
BEC - 77 (08/27/2015) Roger + Ninja MCQ + Half Wiley book questions
AUD - 87 (08/28/2015) Roger + Ninja MCQ + Half Wiley book questions

[Author]

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