The city is installing curbs and sidewalks in a subdivision as part of a special assessment capital improvement project. The capital improvements are being financed by an $800,000 eight year, 10%, special assessment note payable. The note and interest are to be repaid from special assessments levied against the property owners of the subdivision. The total amount of special assessments of $840,000 was levied in the current year and will be collected evenly over eight years beginning next year. The government should report Capital Projects Fund revenues for the current year equal to

Question

Quizplus · Accepted Answer

Capital Projects Fund revenues for the current year would be $0 because the special assessments are levied to be collected in future years, not the current year. Revenue is recognized when it is measurable and available, and in this case, the funds from the special assessments will not be available until future years when they are actually collected.

The City Is Installing Curbs and Sidewalks in a Subdivision