Which of the following would be a component of net position for an enterprise fund?

• A. Current liabilities
• B. Deferred outflows of resources
• C. Net investment in capital assets
• D. Appraised value of land

Answer: (C)

In an enterprise fund, net position is presented with distinct components, including net investment in capital assets, restricted, and unrestricted. Net investment in capital assets represents the portion of net position tied to the fund’s capital assets (such as buildings, equipment, and land) net of any debt used to acquire those assets. This component reflects the long-term value the fund has in its capital investments that support service delivery.

That’s why the correct choice is net investment in capital assets. Current liabilities are obligations that reduce net position but are not themselves a component of net position. Deferred outflows of resources are items that affect net position but are not categorized as one of the three net position components. Appraised value of land isn’t used to determine net position; capital assets are carried at historical cost (and depreciated), so the relevant net asset component is the net investment in capital assets.