The liability for long-term debt issued to provide financing for an enterprise fund and to be serviced from revenues of the enterprise fund should be reported in the financial statements of the enterprise fund,even though the debt also is backed by the general obligation credit of the government.

Question

Quizplus · Accepted Answer

Although the liability should be reported as a liability of the enterprise fund, the fact that it is secondarily a general obligation must be disclosed as a contingent liability in the notes to the financial statements.

The Liability for Long-Term Debt Issued to Provide Financing for an Enterprise