do the notes include the entity rsquo s policies regarding capitalization of collect 641543

Examine the CAFR. Utilizing the CAFR obtained for Exercise 1–1, answer these questions.

a. General and Other Capital Assets:

(1) Reporting of Capital Assets. Are capital assets reported as a line item in the government wide statement of net assets? Are non depreciable capital assets reported on a separate line from depreciable capital assets, or are they separately reported in the notes to the financial statements? Do the notes include capital asset disclosures, such as those for the City and County of Denver shown in Illustration 5–2? Does the disclosure show beginning balances, increases and decreases, and ending balances for each major class of capital assets, as well as the same information for accumulated depreciation for each major class? Are these disclosures presented separately for the capital assets of governmental activities, Business type activities, and discretely presented component units? Do the notes specify capitalization thresholds for all capital assets, including infrastructure? Do the notes show the amounts of depreciation expense assigned to each major function or program for governmental activities at the government wide level? Are the depreciation policies and estimated lives of major classes of depreciable assets disclosed? Do the notes include the entity’s policies regarding capitalization of collections of works of art and historical treasures? Are accounting policies disclosed for assets acquired under capital leases?

(2) Other. Is the accumulated cost of construction work in progress recorded as an asset anywhere? In your opinion, is the information disclosed about construction work in progress and construction commitments adequate? Which fund, or funds, account for cash received, or receivables created, from sales of general capital assets? Are the proceeds of sales of general capital assets reported as another financing source or as revenue?

b. Capital Projects Funds:

(1) Title and Content. What title is given to the funds that function as capital projects funds, as described in this chapter? (Street Improvement Funds and Capital Improvement Funds are common titles, although these titles also are often used for special revenue funds that account for ongoing annual maintenance of roadways.) Where does the report state the basis of accounting used for capital projects funds? Is the basis used consistent with GASB standards discussed in this chapter? Are there separate capital projects funds for each project, are there several funds, each of which accounts for related projects, or is only one fund used for all projects?

(2) Statements and Schedules. What statements and schedules pertaining to capital projects funds are presented? In what respects (headings, arrangement, items included, etc.) do they seem similar to statements illustrated or described in the text? In what respects do they differ? Are any differences merely a matter of terminology or arrangement, or do they represent significant deviations from GASB accounting and reporting standards for capital projects funds?

(3) Financial Resource Inflows. What is the nature of the financial resource inflows utilized by the capital projects funds? If tax supported bonds or special assessment bonds are the source, have any been sold at a premium? At a discount? If so, what was the accounting treatment of the bond premium or discount?

(4) Fund Expenditures. How much detail is given concerning capital projects fund expenditures? Is the detail sufficient to meet the information needs of administrators? Legislators? Creditors? Grantors? Interested residents? For projects that are incomplete at the date of the financial statement, does the report compare the percentage of total authorization for each project expended to date with the percentage of completion? For those projects completed during the fiscal year, does the report compare the total expenditures for each project with the authorization for each project? For each cost overrun, how was the overrun financed?

(5) Assets Acquired under Capital Leases. Were any general capital assets acquired by the primary government or one or more component units under a capital lease agreement during the year for which you have statements? If so, was the present value of minimum lease rentals recorded as an Expenditure and as an Other Financing Source in a capital projects fund (or in any other governmental fund)? If the primary government or one or more component units leased assets from another component unit, how are the assets, related liabilities, expenditures, and other financing sources reported in the basic financial statements or in another section of the CAFR of the reporting entity?