A city considers annual revenues from fines to be immaterial. Under the circumstances, the city

Question

Quizplus · Accepted Answer

According to GASB, fines are "imposed nonexchange revenues." Assets from such events should be recognized in the period an enforceable legal claim arises and revenues should be recognized in the period an enforceable legal claim arises and the resources are available. A key to answering this question is to understand that the fines are considered immaterial. In this case, the fines may be accounted for on the cash basis of accounting. This is common practice by many governments.

A City Considers Annual Revenues from Fines to Be Immaterial