In the government-wide financial statements, the assets acquired under a capital lease would be reported at
A) The total of all payments required under the lease.
B) The present value of the required lease payments.
C) The undiscounted total of required lease payments.
D) They are not reported in the government-wide financial statements.

Question

Quizplus · Accepted Answer

In government-wide financial statements, assets acquired under a capital lease are reported at the present value of the required lease payments. This approach aligns with the principle of recognizing the economic substance of the transaction, which is that the government entity has control over an asset and an obligation to pay for it over time.

In the Government-Wide Financial Statements, the Assets Acquired Under a Capital