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Solid Waste Landfills Under Enterprise Funding

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III. Accounting for Solid Waste Landfills for MSWLFs who use Enterprise Fund Accounting

Government’s operation of solid waste landfills can be reported within the Enterprise Fund if citizens and companies are required to pay a fee in order to use the landfills. Enterprise Funds are usually established for public utilities, health care, transportation and recreation. Certain circumstances might give rise to an obligation to account for solid waste landfills under Enterprise Fund accounting. If the operation is either (1) financed with revenue, (2) regulated by laws establishing that costs must be recovered by fees charged, or (3) designed to recover its costs by established fees as part of the pricing policies, the solid waste landfill must be accounted as an enterprise fund.
Unlike the General Fund, which is accounted for on a modified accrual basis, the Enterprise Fund is accounted for on a full accounting basis, resembling the private sector’s accounting standards. This means that revenue recognition occurs when the revenue is earned, and expense is recognized when the cost is incurred. Some local and state governments might, if eligible and not arbitrarily required, decide to use Enterprise Fund accounting for its solid waste landfills in order to benefit from certain advantages. One of the benefits is that it allows governments to determine the actual cost of providing a service. Since all costs related to operating the enterprise must be identified and classified, governments can obtain a better understanding of how expensive it is to provide a service. Furthermore, management can assess what portion of the costs is recovered through fees charged and what portion is subsidized by other funds or tax levies. Another important benefit is that the government is able to retain investment income and operating surplus in the enterprise fund, which can later be

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