GASB 31 "Accounting for Financial Reporting for Certain Investments and for External Reporting Investment Pools," establishes a general rule that government entities value investments in option contracts,open-ended mutual funds,and debt securities for balance sheet presentation at:
A)lower of cost or market.
B)fair value.
C)cost.
D)amortized cost.

Question

Quizplus · Accepted Answer

GASB 31 requires government entities to value investments in option contracts, open-ended mutual funds, and debt securities at fair value for balance sheet presentation. This means that the investments are reported on the balance sheet at their current market value, rather than at cost or amortized cost. This provides users of the financial statements with more relevant and timely information about the value of the investments.