Governmetal Accounting for Landfills

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    Topic
  • #1908322
    Globetrotter
    Participant

    Hello,
    Could someone PLEASE explain to me how it works?
    What are the journal entries?
    Is it any different from Asset Retirement Obligation?

    Thank you so much.

Viewing 4 replies - 1 through 4 (of 4 total)
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  • #1909324
    YouCanDoIt
    Participant

    https://www.gasb.org/st/summary/gstsm18.html

    From my understanding:
    Landfill Waste sites can be accounted for in 2 ways:
    (1)Proprietary —> as Enterprise Fund
    We would calculate the Current Cost of things like: final cover, facility, equipment and adjust it for inflation/deflation, and basically end up with an estimated cost. Which we would then partially expense over the time UNTIL landfill stops accepting waste (I imagine this is where we use the life of landfill).
    Dr Post Closure Expense
    Cr Liability for Post Closure Expense
    And then when we close the landfill
    Dr. Liability for Post Closure
    Cr Cash

    ———–
    (2)Using a GOVERNMENT fund instead:
    Measure the estimated current cost as we did before, then
    Dr Expenditure
    Cr. Fund Liability (Current? Since its at fund level)

    Remainder would be carried over to Debt service fund?
    —————————————————————————–
    I am not 100% sure, but this is what I found. Refer to the link on top.

    I don’t think we will need to know what to Dr or Cr for however much, but just the general idea.

    FAR: 76
    REG: Currently studying
    AUD:
    BEC:

    #1909330
    YouCanDoIt
    Participant

    Btw, Globe, just saw your FAR take in August, I am taking mine in September. So far, I am on my 1st round of doing the questions, just finishing the government section, and moving onto the Non-profit next. How are you tackling it so far? In review?

    FAR: 76
    REG: Currently studying
    AUD:
    BEC:

    #1909813
    Globetrotter
    Participant

    YouCanDoIt,
    Thank you so much for your reply.

    I have not done all the questions yet but I am trending in the low 80th. Governmental seems to be my weakest area. I cannot even spell it right. 😉

    So do I understand correctly, first the landfill operator needs to estimate all future costs accounted for inflation and discounted back to PV.
    There is no entry for that.
    Then, the cost is being amortized with usage.
    When at the end the costs are incurred and assets are purchased, no asset or expenses are recognized. Instead, the liability is debited?
    Thank you again.

    #1911043
    YouCanDoIt
    Participant

    I believe you are correct with your understanding, that's pretty much what it says it on the GASB website link. The only MCQs I encountered with landfill are just having to know how to treat the long term obligation. The “estimated current costs” are already a given in the question itself. I have not had to do any JE for it, but long as you get the main idea I suppose.
    Best of luck to you on your exam!!

    FAR: 76
    REG: Currently studying
    AUD:
    BEC:

Viewing 4 replies - 1 through 4 (of 4 total)
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