In the net position component called "invested in capital assets,net of related debt" (that appears in proprietary fund financial statements),what is the meaning of net of related debt?
A)bonds,notes,or other borrowings originally issued to acquire or improve the capital assets shown in the amount invested in capital assets
B)outstanding balances of bonds,notes,or other borrowings,issued for any purpose approved by the governing body
C)outstanding balances of all liabilities,regardless of their form,issued to acquire or improve the capital assets shown in the amount invested in capital assets
D)outstanding balances of bonds,notes,or other borrowings,issued to acquire or improve the capital assets shown in the amount invested in capital assets

Question

Quizplus · Accepted Answer

"Net of related debt" means that the amount invested in capital assets reflects the outstanding balances of bonds, notes, or other borrowings that were specifically issued to acquire or improve the capital assets shown in that amount. Therefore, option D is the correct choice. Option A is too narrow as it only includes borrowings specifically issued to acquire or improve capital assets, while option B is too broad as it includes borrowings issued for any approved purpose. Option C includes all liabilities, not just those specifically related to the capital assets in question.

In the Net Position Component Called "Invested in Capital Assets,net