I elrady sent this question and the answered wasnt clear they sent me page which
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I elrady sent this question and the answered wasnt clear they sent me page which is uncler , could you please answer it
Case 9-11 Identification of Component Units Following are descriptions of several relationships between primary governments and other organizations. Using just the information provided, indicate whether you believe the primary government should include the organization as a component unit and give an explanation of how you came to that conclusion. You may find it helpful to use the flowchart discussed in the power points Description Is this a component unit? Explanation Tesi?Municipal Hospital is a not-for profit corporation, whose governing board is appointed by the tessercity mayor. The hospital manages its day-to-day operations and sets its own fee schedule. The governing board provides preliminary approval of the hospital budget, with final approval required by the Tesser city council. Bonded debt for the hospital is repaid with the hospital's revenues. a. b. The Atkins Convention and Visitor's Bureau is a t-for-profit organization funded by hotel tax no levied by the City of Atkins. By city statue, the hotel tax is set by the city and can be used only by the Convention and Visitor's Bureau. The County Aviation Authority has issued bonds that are guaranteed by the City of Middle Falls. The Aviation Authority will use its revenues to service the debt. Middle Falls believes that the probability it will have o cover any debt service requirements related to the Aviation Authority bonds is remote c. d. The Sports Authority of Dawson County is a legally separate organization with its own elected board. It annually presents its budget to the Dawson County Commission for commissioners' input and recommendations. The Sports Authority incorporates those recommendations it deems beneficial. Help for Kids is a not-for-profit organization that receives funding from Alice County. Each year Help for Kids is required to submit its audited financial statements and approved budget to Alice County. County commissioners review the financial statements and budgets to ensure that the resources provided by the county are used in an approved manner e.Explanation / Answer
A) Some component units, despite being legally separate from the primary governments, are so intertwined with the primary governments that they are, in substance, the same as the primary governments and should be reported as part of the primary governments. That is, the component unit's balances and transactions should be reported in a manner similar to the balances and transactions of the primary governments itself. This method of inclusion is known as blending.As specified in this case.Thus the primary governments should include the organization as a component unit.
C) There are numbers of expenses in the organisation of multiple nature .Those that are important are met on the basis of priority.Therefore it is wise that the Sports Authority should incorporates those recommendations it deems beneficial.
D) By mere believing on the probability that it will cover any debt service requirements related to the Aviation Authoritys bonds is remote is just an assumption but records are based on proves and documents.However if the financial statement of the reporting entity generally should allow the user to distinguish between the primary governments and its component units. To accomplish this goal, the financial statements should generally communicate information about the component units and their relationships with the primary governments rather than create the perception that the primary governments and all of its component units are one legal entity.
E) The reporting entity is based primarily on the notion of financial accountability. A primary governments is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body and either it is able to impose its will on that organization or there is a potential for the organization to provide specific financial benefits to, or to impose specific financial burdens on, the primary governments. A primary governments may also be financially accountable for governmentsal organizations that are fiscally dependent on it.Therefore Alice County should include the organization as a component unit.
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