A county was awarded a $900,000 expenditure-driven grant in year 1 for a capital project that is expected to take three years to complete. As of the end of Year 1 the county had incurred expenditures of approximately $50,000. The county should recognize Capital Projects Fund revenue at the end of Year 1 in the amount of

Question

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The revenue recognized in the Capital Projects Fund for the expenditure-driven grant is based on the actual expenditures incurred. Since the county had incurred $50,000 in Year 1, they should recognize revenue for that amount at the end of the year. The remaining grant amount of $850,000 will be recognized as revenue in the following two years as the project progresses and more expenditures are incurred.

A County Was Awarded a $900,000 Expenditure-Driven Grant in Year