Accounting for Government & NPO

Which of the following conditions must be met for the grantor to recognize an infrastructure asset in a service concession arrangement?

• The operator is responsible for financing and maintenance of the infrastructure
• The grantor receives a fixed fee from the operator regardless of usage
• The grantor controls the services provided and the residual interest in the infrastructure.
• The operator determines service performance standards independently.
• None of the Above

How should the grantor account for its obligation to compensate the operator in a service concession where the operator is granted the right to charge users?

• Recognize a financial liability equal to the cost of the infrastructure
• No recognition required as the operator bears full risk
• Recognize a liability under the 'grant of a right to the operator' model
• Record a deferred income liability amortized over the concession period
• None of the Above

Which of the following best explains the rationale for the grantor’s recognition of a performance obligation in an SCA?

• The grantor guarantees the operator’s profit margin
• The grantor compensates the operator through a performance-based service fee
• The operator bears the demand risk and usage fluctuation
• The infrastructure is provided as consideration for future services from the operator
• None of the Above

Which of the following disclosures is mandatory to enhance transparency in public-private partnerships?

• Expected return on equity of the operator
• Forecasted user demand and fees
• Significant terms affecting timing and amount of cash flows
• Projected concessionaire bonuses and incentives
• None of the Above

Which arrangement necessitates recognition of a financial liability rather than an intangible asset?

• The operator is paid entirely from user fees
• The grantor compensates the operator through annual subsidies
• The operator has full rights to the infrastructure asset
• The concession arrangement involves public land use without operator compensation
• None of the Above

Under NPO accounting, which of the following is not classified as net assets with donor restrictions?

• Endowments required to be held in perpetuity
• Contributions restricted for a specific program
• Funds restricted for future building acquisition
• Unrestricted grants from government agencies
• None of the Above

Which statement best distinguishes NPO accounting from business entities under PFRS?

• Revenues are deferred until expenses are incurred
• Surplus is measured by changes in net assets
• Expenses are classified by nature only
• Assets are recognized only when cash is received
• None of the Above

A university receives a multi-year pledge of ₱5 million, payable in three equal annual installments. When should it recognize the full amount under accrual-based accounting?

• Only when cash is received
• In full, when the pledge is legally enforceable and unconditional
• At the start of each year
• At the end of each year when services are rendered
• None of the Above

Which item qualifies for recognition as revenue from contributions in-kind?

• Time donated by student volunteers
• Donated services not requiring special skills
• Donated medical services by licensed doctors
• Internal transfer of goods between programs
• None of the Above

Which of the following is not included in a typical NPO’s Statement of Financial Position?

• Net assets without donor restrictions
• Distributable profit
• Contributions receivable
• Property and equipment
• None of the Above