In its Statement of Net Assets, a government reported: Assets of $90 million, including $30 million in capital assets (net) and liabilities of $50 million, including long-term debt of $15 million, all related to capital asset acquisition. The government also reported $5 million of net assets were restricted for payment of debt service. The government's unrestricted net assets would be reported as:

Question

Quizplus · Accepted Answer

Unrestricted net assets are calculated as total net assets minus restricted net assets. Total net assets are $40 million ($90 million assets - $50 million liabilities). Subtracting the $5 million restricted for debt service, the unrestricted net assets are $35 million. However, since $15 million of the liabilities are related to capital assets, the unrestricted net assets are $20 million ($35 million - $15 million).

In Its Statement of Net Assets, a Government Reported: Assets