AGA Examination 2: Governmental Accounting, Financial Reporting and Budgeting (GAFRB) GAFRB Question # 6 Topic 1 Discussion
GAFRB Exam Topic 1 Question 6 Discussion:
Question #: 6
Topic #: 1
When a rural community creates a fire district to serve an area previously served by the county government, and the fire district receives no money or equipment from the county, this is an example of
According to GASB Statement No. 69 (Government Combinations and Disposals of Government Operations), a transfer of operations occurs when one government relinquishes or ceases operations and another government assumes those operations, but no significant consideration (money, assets, or liabilities) is exchanged.
In this case, the fire district is assuming responsibility for fire protection without receiving funds or assets from the county. That aligns with the definition of a transfer of operations — not a merger or acquisition.
Relevant References:
GASB Statement No. 69 – Government Combinations and Disposals of Government Operations
GASB Codification Section G60 – Combinations and Transfers
GFOA Guidance on Intergovernmental Restructuring
Answer: C. a transfer of operations
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