P15-6 (Blending and Discrete Presentation) Provide a brief analysis of the following and answer the related questions:

1. Describe discrete presentation in the context of the government-wide statements. Assume that a government has three discretely presented component units. The component units are a utility operation, a hospital, and a school district. What are the reporting options available on the government-wide financial statements? On the fund financial statements? What are the reporting entity note disclosure requirements? What other note disclosures may be required for each of the discrete component units?
2. Describe blending. When is it required? Is it permitted under other circumstances (i.e., is it ever optional)? How do blended component units affect the government-wide financial statements? The fund financial statements? What are the reporting entity note disclosure requirements? What other note disclosures may be required?