What year Becker materials does this come from?  Bisk 2009 software has a similar question, and the answer is Yes - Yes.  And I agree, most public universities are treated as enterprise funds.

Is the recognition of depreciation expense required for public colleges and private not-for-profit colleges?

Public  Private
A  No   Yes
B  No   No
C  Yes  Yes
D  Yes  No

Question ID: 2752, Bisk: 20-1-7
Choice C is correct.  SFAS 93 requires that all nongovernmental nonprofit organizations record depreciation on most long-lived tangible assets. GASB 34 specifies that governments must report depreciation, unless they use the modified approach.

asp87: Since you have the Becker 2009 materials you also should have access to Becker Academic Support - Ask Becker a Question.  Have you tried asking them?  I found them to be very good at answering questions within less than a day.

http://beckerkb.custhelp.com

I believe the mistake was made by Bisk.  Bisk is citing GASB 34.  Becker's guidance appears to come from GASB 34 and 35.

Bisk's comment "unless they use the modified approach" also implies that the answer is not "Yes-required" so much as it is "Yes-but".  Bisk's explanation thus appears to contradict their answer.

Wiley 2009, page 885 says: "...public colleges may choose to use the guidance for special purpose governments engaged in (1) only business-type activities, (2) engaged in only governmental activities, or (3) engaged in both governmental and business-type activities."  This appears to mirror what Becker is saying.

Hmm, theoretically if you have a school that is recorded in a governmental fund (that would have to be a tuition-free school? don't know if there are ever any of those), then in the fund based statements, you wouldn't record depreciation expense.  I guess the general rule, though, is that public universities are accounted for in enterprise funds.

from chapter 18 page 790 of my advanced accounting textbook:

Accounting for public colleges and universities, however, became standardized in November 1999 when the GASB issued its Statement 35, “Basic Financial Statements—and Management’s Discussion and Analysis—for Public Colleges and Universities—An Amendment to GASB Statement 34,” which applied the reporting standards (including depreciation) established by GASB Statement 34 to public schools. As noted in the previous chapter, many public schools have decided that they are solely proprietary funds so that only fund-based statements are needed. Thus, this pronouncement narrowed many of the distinctions between the two reporting models but certainly not all.  Apparently, the need for precise comparability between public and private not-for-profit universities is not viewed as an essential objective.

At the end of the chapter, there is also the following problem:

3.  Which of the following statements is true?
I. Private not-for-profit universities must report depreciation expense.
II.Public universities must report depreciation expense.

a.Neither I nor II is true.
b.Both I and II are true.
c. Only I is true.
d.Only II is true.

answer is B

you can download the powerpoint slides at
http://highered.mcgraw-hill.com/sites/007337945x/information _center_view0/

you can download a free trial of the textbook at
http://store.vitalsource.com/show/9780073379456

Also see slide 7 of the chapter 17 slides from this textbook http://wps.prenhall.com/bp_freeman_nonprofit_7/