Which of the following may NOT be reported as an asset in a governmental fund?

In the context of governmental accounting, assets reported in governmental funds must adhere to the principle of financial resources measurement focus and modified accrual accounting. The key aspect here is the treatment of various types of assets held for resale, particularly when they have not yet been sold prior to the issuance of financial statements.

The correct answer indicates that all the listed assets — foreclosure assets, redevelopment properties, and donated capital assets — may indeed be reported as assets in governmental funds because they are resources that can potentially be converted to cash. Specifically, each of these asset types is intended for resale, meaning they can provide future economic benefits, aligning with the asset recognition criteria.

• Foreclosure assets represent properties taken back by a government entity due to non-payment, and even if they have not been sold by the time of the report, they are still considered an asset because the government intends to sell them to recover value.

• Redevelopment properties are analogous; they are typically held by the governmental entity with the goal of promoting development in a specific area, and their resale can generate funds for further projects or services.

• Donated capital assets, while traditionally associated with governmental fund capital, can also be held for resale, making them assets within the governmental fund framework.

Thus, since all