A city engages in an in-substance defeasance of long-term bonds and accordingly invests in, and sets aside,

Question:

A city engages in an in-substance defeasance of long-term bonds and accordingly invests in, and sets aside, the long-term securities necessary to make the required interest and principles payments on the debt to be retired. Should, and if so under what circumstances, the city report the securities on its ﬁnancial statements?