Government colleges and universities may elect to report as special purpose entities engaging (1) only in business-type activities, (2) only in governmental activities, or (3) in both.

Answer 1

If they elect to report as a government engaging in both business-type and governmental activities, they will have to present the full range of fund and government-wide statements. If they elect to report as a special purpose government engaging only in governmental activities they need also present both fund and government-wide statements, but can combine the two. If they elect to report as a government engaging only in business-type activities — as most government colleges and universities do — then they need present only a statement of net assets, statement of revenues and expenses, and a statement of cash flow. These would have to be on a full-accrual basis.