A city starts a solid waste landfill during 2007.When the landfill was opened the city estimated that it would fill to capacity within 5 years and that the cost to cover the facility would be $1.5 million which will not be paid until the facility is closed.At the end of 2007,the facility was 20% full,and at the end of 2008 the facility was 45% full.If the landfill is judged to be a governmental fund,what liability is reported on the fund-based financial statements at the end of 2008?

Question

Quizplus · Accepted Answer

Governmental funds use the modified accrual basis of accounting, which does not recognize long-term liabilities. Therefore, no liability for the landfill closure cost is reported in the fund-based financial statements.

A City Starts a Solid Waste Landfill During 2007