At December 31, 2018, a Water Enterprise Fund has outstanding revenue bonds payable of $1 million, of which $40,000 is due to be paid on February 15, 2019, and $50,000 is due to be paid on August 15, 2019. How should it report this liability in its fund statement of net position as of December 31, 2018?

Question

Quizplus · Accepted Answer

Revenue bonds are debt securities that are secured exclusively by the revenues generated by the fund issuing the debt (in contrast to general obligation bonds, which are secured by the "full faith and credit"-the general taxing power- of the government). Revenue bonds are reported in the fund that issues the debt using the economic resources measurement focus and the full accrual basis of accounting. In addition, Enterprise Fund statements of net position should be presented using a "classified" format.

At December 31, 2018, a Water Enterprise Fund Has Outstanding