Criteria for Reporting Entities (Cont’d)
Key criteria as to whether a primary government is financially accountable for another government:
-The primary government appoints a voting majority of the unit’s governing body (or)
-A majority of the unit’s governing body is composed of primary government officials.
In addition, either one of the following criteria must be satisfied.
-The primary government is able to impose its will upon the potential component unit.
-The component unit is able to provide specific financial benefits to, or impose specific financial burdens on, the primary government.