Two cities entered into a contractual agreement to operate a landfill. The cities each contributed the necessary assets to operate the landfill in proportion to their populations. Each city has the ability to appoint two members of the governing body of the landfill, and each has an equity interest in the arrangement. The assets contributed by First City were primarily in the form of property and equipment that had been used in general government activities. In what manner would the landfill be included in First City's government-wide financial statements?
A) As an investment.
B) Discretely presented.
C) Note disclosure only.
D) Not included in any manner.

Question

Quizplus · Accepted Answer

The landfill would be included as an investment in First City's government-wide financial statements because both cities have an equity interest in the arrangement.

Two Cities Entered into a Contractual Agreement to Operate a Landfill