State the circumstances under which a special purpose government will be considered as primary government.
Explanation of Solution
Primary Government: As per GASB “a primary government is a state government or general purpose government. Primary government can also be treated as special purpose government that has a separate elected governing body, is legally separate and is fiscally independent of other state or local governments”. A legally separate organization has its own identity as “artificial person” with a personality and existence different from its creators and others. A special purpose government can be a fiscally independent organization by having authority to decide the budget, levy its own taxes, set rates or charges, and issue bonded debt without approval of another government.
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Chapter 9 Solutions
ACCT GOV.+NFP ENTITIES LOOSELEAF W/CONN.
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