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AGA GAFRB Exam - Topic 2 Question 21 Discussion

When a rural community creates a fire district to serve an area previously served by the county government, and the fire district receives no money or equipment from the county, this is an example of
C) a transfer of operations.
A) a government merger.
B) a government acquisition.
D) intergovernmental operations. According to GASB Statement No. 69 (Government Combinations and Disposals of Government Operations), a transfer of operations occurs when one government relinquishes or ceases operations and another government assumes those operations, but no significant consideration (money, assets, or liabilities) is exchanged. In this case, the fire district is assuming responsibility for fire protection without receiving funds or assets from the county. That aligns with the definition of a transfer of operations --- not a merger or acquisition. Relevant Reference: GASB Statement No. 69 -- Government Combinations and Disposals of Government Operations GASB Codification Section G60 -- Combinations and Transfers GFOA Guidance on Intergovernmental Restructuring Answer : C. a transfer of operations

AGA GAFRB Exam - Topic 2 Question 21 Discussion

Actual exam question for AGA's GAFRB exam
Question #: 21
Topic #: 2
[All GAFRB Questions]

When a rural community creates a fire district to serve an area previously served by the county government, and the fire district receives no money or equipment from the county, this is an example of

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Suggested Answer: C

by Rosendo at Jun 26, 2026, 11:11 AM

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Andra
5 hours ago
Based on GASB Statement No. 69, it seems clear that since no assets or money were exchanged, it must be a transfer of operations. I’ll go with C.
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Paola
5 days ago
I’m a bit confused because I thought a merger involved more collaboration between governments. Does this really fit the definition of a transfer of operations?
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Leonor
11 days ago
I remember practicing a question similar to this where a city took over a service from the county, and it was classified as a transfer of operations. So, I feel confident about choosing C.
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Lashanda
16 days ago
I think this is about how one government takes over the functions of another, but I'm not entirely sure if it's a transfer of operations or intergovernmental operations.
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