Enterprise Funds | Landfill Cost | Governmental Accounting | CPA exam FAR
3,598 views · Published 25 July 2017 · 12:26 · Indexed 23 September 2026
Channel: Farhat Lectures. The # 1 CPA & Accounting Courses · 2017 · Education
How do governments account for landfill closure and post-closure costs? This lecture explains municipal solid waste landfill cost accounting in an enterprise fund — the post-closure liability, the usage-based expense formula, and multi-year adjustments — a governmental accounting (FAR) topic for CPA candidates and accounting students. Try it free at farhatlectures.com — interactive exercises, lectures, simulations, cases, multiple choice, and AI tools for CPA, CMA, EA and students. Video Timeline & Key Concepts: 0:00 — Introduction: accounting for landfill costs in an enterprise fund 3:37 — Post-closure costs and long-term environmental maintenance 3:55 — Accounting entries: annual expense and liability 4:33 — The computation formula for annual landfill expense 6:30 — Year 1 example 8:03 — Years 2 and 3: adjusting for updated estimates Frequently Asked Questions: How are landfill closure and post-closure costs recognized? Costs are recognized gradually over the life of the landfill. Each year the government records an expense and a liability based on the portion of the landfill capacity used to date, using the accrual basis. What is the formula for annual landfill expense? Multiply total estimated closure and post-closure cost by capacity used to date divided by total estimated capacity to get the cumulative expense, then subtract prior years’ accumulated expense to get the current year expense. Why must landfill cost estimates change annually? Estimates of total cost and total capacity are updated as new environmental, regulatory, and engineering information becomes available, so the cumulative expense is recalculated each year to reflect current projections. Which fund is used to account for a landfill? A municipal solid waste landfill is typically accounted for in an enterprise fund, a proprietary fund that uses full accrual accounting because it charges the public for the service. What are post-closure costs? Post-closure costs are the long-term costs of monitoring and maintaining a closed landfill, such as monitoring groundwater and controlling gas, which must be accrued while the landfill is still in use. #CPAexam #CMAexam #enrolledagentexam #accountingcourses #collegecourses #courses #FAR #governmentalaccounting #enterprisefunds #landfillcost #ProfessorFarhat
