Option #2: GASB 34 and Moral Obligation Bonds

Instructions: Provide complete answers to the following two questions.

1. Per the provisions of Statement No. 34, governments must report their capital assets similarly to businesses in their government-wide statements. Yet the information provided is still inadequate to facilitate the major types of decisions and judgments made by statement users. Do you agree? Explain.

2. What distinguishes moral obligation bonds from other types of debt? Why would one government assume a moral obligation for another governments bonds?