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Paul City Received Payment of Two Grants from the State

Question 44

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Paul City received payment of two grants from the state during its fiscal year ending September 30, 2016. Grant A can be used to cover any operating expenses incurred during fiscal 2017. Grant B can be used at any time to acquire equipment for the city's fire department. Should the city report these grants as grant revenues or deferred inflows in its governmental fund financial statements for fiscal 2016? Paul City received payment of two grants from the state during its fiscal year ending September 30, 2016. Grant A can be used to cover any operating expenses incurred during fiscal 2017. Grant B can be used at any time to acquire equipment for the city's fire department. Should the city report these grants as grant revenues or deferred inflows in its governmental fund financial statements for fiscal 2016?

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