The city created a legally separate housing authority to provide low-income housing to residents of the city. The city issues debt for the housing authority in the name of the city, but the housing authority is responsible for repayment of the debt. The housing authority is governed by a board composed of all five members of the city council. The authority can take action based on the affirmative vote of a simple majority of the board. In what manner would the authority be included in the city's basic financial statements?

Question

Quizplus · Accepted Answer

The housing authority would be included in the city's basic financial statements in a blended manner because it is closely related to the city (the city issues debt on its behalf and the city council members govern it), indicating a financial accountability that typically warrants blending in financial reporting.

The City Created a Legally Separate Housing Authority to Provide