What does capital assets mean on the CPA exam?
Capital assets. In GOVERNMENTAL reporting, long-lived assets such as land, buildings and infrastructure. Not the same as the tax term capital asset, which is defined by exclusion in Sec. 1221.
Defined against GASB 34.
Which CPA exam sections use capital assets?
Capital assets appears in 6 CPA exam sections: AUD, BAR, FAR, ISC, REG, TCP.
Other terms defined against GASB 34
- enterprise fund: A proprietary fund used where a government charges outside users for goods or services, run on the full accrual basis like a business.
- full accrual: Recognizing revenue when earned and expense when incurred, and reporting every asset and liability including long-term ones.
- governmental activities: The part of a government's operations financed mainly by taxes rather than by fees, reported on the government-wide statements on the full accrual basis.
- governmental funds: The funds that account for tax-supported activity, reported on the modified accrual basis with a current financial resources focus.
- internal service fund: A proprietary fund that supplies goods or services to other parts of the same government on a cost-reimbursement basis, such as a motor pool.
- management's discussion and analysis: A narrative overview management provides ahead of the financial statements.
- modified accrual: The basis for governmental fund statements: revenue when measurable and available, expenditure when the liability is incurred.
- required supplementary information: Schedules a government must present outside the basic statements, such as budgetary comparisons and pension trend data.
Related terms
- net assets: Assets less liabilities.
- capital asset: For tax, almost everything a taxpayer owns EXCEPT inventory, receivables, and depreciable or real property used in a trade or business.
- hot assets: A partnership's unrealized receivables and inventory.
- average total assets: The average of opening and closing total assets, used wherever a period flow like sales is compared to a balance.
- net capital gain: Net long-term capital gain minus net short-term capital loss.
- total assets: Everything the entity controls that is expected to produce future benefit, added up.