Can blended component units be included as part of a primary government fund?

Blended component units can indeed be included as part of a primary government fund due to the nature of their relationship with the primary government. When a component unit's governing body is substantially the same as the governing body of the primary government, or if it serves the primary government exclusively, it is often blended into the financial statements of the primary government. This blending treats the component unit as part of the primary government for financial reporting purposes.

This approach allows for a more comprehensive view of the financial position and operational accountability of the primary government, as it reflects more accurately the resources that are available and the obligations that exist. It is also consistent with the accounting principles that emphasize the importance of presenting a transparent financial picture to the users of financial statements, such as taxpayers and oversight bodies.

The assertions regarding exclusion, separate legal status, or reporting only in their own reports misrepresent how these blended units are incorporated into the primary government’s financial statements, underscoring the uniqueness of blended component units in accounting literature.