Governmental not-for-profit accounting course:

- there is no financial information needed for this question -

The Atlanta Transit Authority (ATA) was established by the city to construct, operate, and maintain the city's mass-transit train system. The ATA was created by the city as a separate legal entity, with powers to issue revenue bonds payable from railway fees and other revenues.

The 9-member governing body of the ATA consists of six members appointed by the mayor for fixed 10-year terms, and three city officials serving ex officio- the elected city treasurer, the elected city comptroller and the appointed superintendent of transportation.

The ATA is financially self-sufficient, and it sets its own rates and approves its own budget. The city cannot access its assets or surpluses, nor is it obligated to subsidize deficits of the ATA.

The ATA has issued bonds to help fund recent construction and renovations projects. The related bond agreement states that the debt of the ATA is not an obligation of the city. However, city statutes authorize the city's budget director to include in the budget submitted to the City Council an amount sufficient to meet debt service requirements.

Is the ATA a component unit of the city?

If so, how should the city present the financial activities of the ATA in its Comprehensive Annual Financial Report (CAFR)?

Specifically address both the government-wide and the fund basis financial statement presentation considerations.