General capital assets are not considered appropriable resources and unmatured general long-term liabilities are not current liabilities. Hence, these assets and liabilities would not appropriately be accounted for within a municipality’s governmental (expendable) funds, which are net current financial resource entities. Further, general capital assets are considered to belong to the government as a whole, not to a particular department or enterprise; and unmatured general long-term liabilities are likewise considered obligations of the government, not of a specific fund. Thus, neither fits conveniently into the existing fund structure of state and local governmental accounting and both are accounted for through the General Capital Assets and General Long-Term Liabilities nonfund accounts. They are reported only in the government-wide financial statements.
Capital assets and long-term liabilities are accounted for in:
– General Capital Assets and General Long-Term Liabilities accounts
– Enterprise Funds
– Internal Service Funds
– Trust Funds (some)
General capital assets and general long-term liabilities are accounted for in the General Capital Assets and General Long Term Liabilities accounts. They are related to general government (governmental) activities.
A Special Revenue Fund should be used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.
A Capital Projects Fund should be used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets.
A Debt Service Fund should be used to account for and report financial resources that are restricted, committed, or assigned to expenditure for principal and interest on general long-term liabilities.