|Posted: 25 Jun 2009 at 09:40 | IP Logged
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
you can download a free trial of the textbook at
Also see slide 7 of the chapter 17 slides from this textbook http://wps.prenhall.com/bp_freeman_nonprofit_7/