Interest on debt legally restricted for use in a specific governmental function is typically reported how?

When interest on debt is legally restricted for use in a specific governmental function, it must be reported in a way that reflects its restricted nature and the purpose for which it can be used. Reporting it as a separate line within governmental activities allows for greater transparency and provides a clearer picture of how resources are allocated and used. This separate reporting is essential for users of financial statements, such as taxpayers and policymakers, as it highlights the specific funding groups that support particular governmental functions.

This approach also enhances accountability and helps ensure compliance with legal restrictions, allowing stakeholders to see which funds are designated for specific uses. Thus, showing this interest as a separate line item serves to clearly delineate these resources from other general resources, indicating their intended purpose and importance within the governmental financial structure.