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AGA CGFM Exam - Topic 1 Question 80 Discussion

A capital asset transferred to another department within the same government should be
D) retained in the government's fixed asset tracking system showing the book value of the asset transferred to the receiving department.
A) recorded with the original department to maximize receipts.
B) recorded with the second department to minimize costs.
C) retained in the government's fixed asset tracking system with no change in book value to either department.

AGA CGFM Exam - Topic 1 Question 80 Discussion

Actual exam question for AGA's CGFM exam
Question #: 80
Topic #: 1
[All CGFM Questions]

A capital asset transferred to another department within the same government should be

Show Suggested Answer Hide Answer
Suggested Answer: D

* Capital Asset Transfers Within the Same Government:

When a capital asset is transferred between departments within the same government, the asset's book value (its original cost minus accumulated depreciation) should remain in the fixed asset tracking system.

The transfer does not change the overall value of the asset for the government as a whole, but it should reflect that the asset is now under the responsibility of the receiving department.

* Why This Is Important:

Accurate tracking ensures the fixed asset system reflects the current custodian of the asset and allows for proper asset management and accountability.

* Why Other Options Are Incorrect:

A . Recorded with the original department to maximize receipts: This is incorrect because it ignores the asset's transfer and would misrepresent which department is responsible for it.

B . Recorded with the second department to minimize costs: Cost minimization is irrelevant here; the transfer should reflect the book value.

C . Retained with no change in book value to either department: While the book value doesn't change overall, the system must reflect the transfer to the receiving department.

* Reference and Documents:

GAAP (Governmental Accounting Standards Board - GASB): Requires accurate fixed asset tracking to reflect departmental transfers.

GASB Statement No. 34: Discusses fixed asset tracking and reporting requirements.


by Irma at Jan 27, 2026, 04:41 PM

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Abel
True, but transferring at book value simplifies tracking.
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Junita
5 days ago
But what if the asset's value has changed?
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Salina
10 days ago
Agreed, that keeps the accounting consistent.
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Carry
15 days ago
I think it should be recorded at its book value.
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Celeste
2 months ago
Sounds a bit off to me, I need to look into this more.
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Levi
2 months ago
Yup, book value is the way to go for internal transfers.
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Broderick
2 months ago
Wait, are you sure about that? I thought it was fair market value.
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Josefa
3 months ago
Totally agree, that’s standard practice!
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Trevor
3 months ago
It should be recorded at its book value.
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Nichelle
3 months ago
Wait, do we get to keep the asset if we transfer it to another department?
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Flo
3 months ago
Shouldn't the asset be transferred at its depreciated value?
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Mee
3 months ago
Haha, the answer is obviously "with a parade and a marching band!"
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Deeanna
3 months ago
I think the asset should be transferred at its original cost.
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Tony
4 months ago
The asset should be transferred at its fair market value.
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Antonio
4 months ago
I’m a bit confused about the treatment of depreciation during the transfer. Do we continue to depreciate it in the receiving department?
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Lai
4 months ago
I believe we need to consider whether the transfer affects the financial statements of either department. That was a key point in our last review session.
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Esteban
5 months ago
I remember a practice question about interdepartmental transfers, and it mentioned something about fair market value. Is that relevant here?
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Tonette
5 months ago
I think the asset should be recorded at its book value when transferred, but I'm not entirely sure about the specifics.
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Gail
5 months ago
Ugh, asset transfers between departments - that's always a confusing topic. I'll have to really concentrate to work through this one step-by-step.
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Samuel
5 months ago
I've seen questions like this before. I'd make sure to read the question carefully and think about the overall context of asset management in government.
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Micaela
5 months ago
Okay, for this type of question, I'd focus on identifying the key factors to consider, like the ownership and purpose of the asset. That should guide me to the right answer.
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Desmond
6 months ago
Hmm, this seems like a tricky one. I'm not totally sure how to approach it, but I'll try to think through the relevant policies and regulations.
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Lajuana
6 months ago
I think I'd start by considering the accounting principles around asset transfers between departments. That would help me determine the appropriate treatment.
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