How should a government value its participation in an investment pool operating under SEC Rule 2a7?

The correct approach for a government to value its participation in an investment pool operating under SEC Rule 2a-7 is based on share price. This is because investments in money market funds governed by this rule are typically reported using the net asset value (NAV), which is often expressed in terms of share price. Since these investment pools are designed to maintain a stable value per share (usually $1 per share), the valuation reflects the current share price in relation to the fund's assets.

Using the share price provides transparency and reliability in reporting, aligning with the standards set for such investment vehicles, thereby ensuring that governments can accurately represent and assess their financial positions concerning these investments. It is an important practice that maintains consistency with accounting principles geared toward ensuring that financial statements are reflective of the real-time value of investments held in such pools.