Technical Issues: Assets Used in Operations V. Assets Held for Resale
GAAFR Review › Vol. 24 Nbr. 5, May 2007
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Summary
An asset's intended use can have a significant impact on how it is treated for accounting and financial reporting purposes. In government-wide financial statements, the purpose for which an asset is acquired will determine how it is valued. If an asset is acquired for the purpose of resale, it is only logical that the value reported not exceed the amount reasonably expected to be realized upon sale. The same rule applies to fixed assets. In governmental funds, fixed assets acquired for resale are properly reported as assets in governmental funds and reflected in unreserved fund balance. Fixed assets acquired for use in operations, whether purchased or donated, are not reported in governmental funds.
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Technical Issues: Assets Used in Operations V. Assets Held for Resale
An asset's intended use can have a significant impact on how it is treated for accounting and financial reporting purposes. Thus, for example, property held for resale is not accounted for in the same manner as property that will be used in operations. Nor are supplies...
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