Which statement is FALSE about blended component units?

The statement asserting that blending applies if the unit provides services almost exclusively to the primary government is not accurate in the context of blended component units. Blending occurs primarily based on the governance and financial relationships between the primary government and the component unit, rather than solely on the nature of services provided.

For a component unit to be blended, it generally must meet specific criteria related to the degree of control that the primary government has over it. If the governing board of the component unit is the same as the primary government, it is typically blended into the primary government's financial statements. Moreover, blending can also occur if the component unit is financially dependent on the primary government. In contrast, if a unit provides services almost exclusively to the primary government, this does not automatically result in blending; other criteria related to governance must also be met.

Thus, the key factor in determining whether blending occurs is the relationship and governance structure between the primary government and the component unit, rather than the nature of the services rendered.