How should revenues from operating-type special assessments be treated in the activities statement?

Revenues from operating-type special assessments should be classified as program revenues under the category of operating grants and contributions because they are specifically tied to the provision of services. Operating-type assessments are designed to fund ongoing operating expenditures rather than capital projects. This reflects the nature of the revenue as it is intended for ongoing operational activities of the government entity, thereby providing a closer alignment with the definition of operating grants.

In governmental accounting, it’s important to accurately categorize revenues to ensure that financial statements provide clear insights into how resources are being allocated. Classifying these revenues as program revenues allows stakeholders to better understand the financial support for the programs being funded through these assessments. Capital grants and contributions, on the other hand, are generally related to the acquisition or construction of capital assets, which does not align with the purpose of operating-type special assessments. General revenues, while encompassing various sources of income, do not specifically pertain to the funding of operational services, which reinforces the appropriateness of the operating grants and contributions designation for these assessments.