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FAR > 16. Format/contents Of CAFR, Typical Items/specific Type Of Transactons/events > Flashcards

16. Format/contents Of CAFR, Typical Items/specific Type Of Transactons/events Flashcards

1
Q

What are 3 sections of the Comprehensive annual financial report (CAFR)?

A

Introductory
Financial
Statistical

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2
Q

What’s included in the introductory section?

A

Letter of transmittal
Organization chart
Principal officers
Other

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3
Q

What’s included in the financial section?

A 
Independent auditor's report
MD&A
Basic financial stmts
RSI
Combining stmts and individual fund stmts
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4
Q

What’s included in the statistical section?

A 
Financial trend
Revenue capacity
Debt capacity
Demographic and economic
Operating information
Other
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5
Q

What are the minimum required financial reporting?

A

MD&A
Basic financial stmts
RSI

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6
Q

What’s included in the basic financial stmts?

A

Government wide financial stmts
Fund financial stmts
Notes

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7
Q

What are 2 financial stmts for government wide stmts?

A

Stmt of net position

Stmt of activities

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8
Q

What’s included in stmt of net position?

A

Governmental activities
Business activities
Net position: net investment in capital assets, restricted, unrestricted

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9
Q

What are 2 sections in the stmt of activities and 4 sections within each of the 2?

A

Governmental activities
Business activities

Program expenses
Program revenues
Net program (expenses) revenues
General revenues

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10
Q

How to handle internal service funds?

A

Blends in governmental activities section (most) and business type activities section (a few).

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11
Q

Which fund is included in business activities?

A

Enterprise fund

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12
Q

How to handle capital outlay expenditures? Depreciation expense? Debt principal pmt expenditures? Interest expenditures?

A

Eliminate and establish capital assets.
Record (it was not recorded).
Eliminate and establish debt principal.
Convert to interest expense.

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13
Q

How to handle interfund payable/receivable, transfers?

A

Eliminate

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14
Q

What are 2 financial reporting units?

A

Primary government

Component unit

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15
Q

Elected governing body
Separate legal entity
Fiscal independence
Which reporting unit?

A

PG

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16
Q

What are 2 characteristic of a component unit?

A

Financially dependent

Financially accountable to primary government.

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17
Q

List 3 cases of financial accountability

A

Appointing authority + financial benefits/burdens
Appointing authority + ability to impose will
Fiscal dependence + financial benefits/burdens

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18
Q

What are 3 characteristics of financial dependence?

A

Establish its budget
Levy tax or set rates or charge
Issued bonded debt

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19
Q

Can tax exempt organization a component unit? When?

A

Yes. When it raises or holds economic resources for the direct benefits of the PG

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20
Q

What are 2 presentation approach for CP?

A 
Blended (when PG/CU activities similar)
Discretely presented (separate column)
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21
Q

When can the blended approach be used?

A

CU’s and PG’s governing body are substantially the same
CU provides services only for the PG
CU benefits PG exclusively
PG has a fiduciary responsibility for CU (pension plan)

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22
Q

What are two major fund rules?

A

Total assets and deferred outflow of resources, liab and deferred inflow of resources, revenues, or expenditures/expenses of any individual governmental fund or enterprise fund are at least:
10% of the total corresponding amounts for all funds of the category, and
5% of the corresponding amounts for that element (ex: revenue) for all governmental and enterprise fund combined

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23
Q

Is general fund major or non major fund?

A

Always major fund

24
Q

How to report all non major funds?

A

Aggregate

25
Q

Which funds require budgetary comparisons for reporting?

A

General fund

Annually budgeted major special revenue

26
Q

Is internal service fund major or non major? How are they reported?

A

Neither. Aggregated in one column

27
Q

Are fiduciary funds major or non major?

A

Never major fund

28
Q

What are 4 types of interfund transactions?

A

Quasi-external transactions (fee involved services between funds)
Reimbursements
Transfers
Loans

29
Q

If a fund pays for a vender for another fund in error, how should reimbursement recoded?

A

Reduction of expenditure/expense

30
Q

What are the account names for ST and LT loans?

A

Due to, due from

Advance to, advance from

31
Q

What are examples of infrastructure (systems of things) assets?

A

Highways, bridges, streets, sidewalks, sewerage systems, drainage systems, lighting systems

32
Q

Infrastructure assets should be capitalized and depreciated unless modified approach is taken. Explain

A

Elect not to capitalize the asset and not to depreciate if:
The government preserves the asset in a condition equal to or above the original condition
Expenditures to preserve the condition are expensed as a substitute for depr.

Must: Record keeping and documentation of condition status
R: up to date inventory, condition assessment, estimate of cost to maintain/preserve
D: complete assessment every 3 yrs, evidence of ok in most recent document

33
Q

List 4 new terminology for pension accounting.

A

Accounting base approach
Net pension liab
The entry-age actuarial cost method
Biennial actuarial valuations required

34
Q

Pension and Other post-employment benefits (OPEB):

Governmental Funds: net pension liab and pension expenditure?

A

The amount expected to be liquidated with expendable available financial resources

The total of amounts to be pd to the pension and the change in the beg/end net pension liab

35
Q

Pension and OPEB: proprietary funds:

Net pension liab and pension expense

A

Residual amount

Changes in net pension liab

36
Q

Capital lease criteria and treatment for government wide and proprietary funds? Governmental funds?

A

Same as for profit

Asset value: PV of minimum pmt + initial cash pmt

No asset reported. Recognize pmts as expenditures as it pays

37
Q

Municipal landfill: usually which fund?

Allocation method?

A

Proprietary fund

Units of production method

38
Q

What are 6 classification for expenditures?

A

By fund, program/function, activity under the program, organizational unit, character, object

39
Q

Character classification: identify expenditures based on what?
List 4 types

A

Period benefited

Current
Capital outlay
Debt service
Intergovernmental

40
Q

Object (names) classification examples

A

The names

Supplies, land, building ….

41
Q

Revenue classification is often based on what?

A

On sources

42
Q

What are 4 types of non exchange transactions?

A

Derived tax revenues (from exchange transactions such as fuel tax)
Imposed tax revenue (from assessment or levy)
Government mandate (abuse program in exchange of grant…)
Voluntary (legislative/contractual agreements between willing parties)

43
Q

Tax abatement: should it be reported individually or aggregated?

A

Both ok

44
Q

Tax abatement disclosures?

A 
Brief description
Gross dollar amounts
Amounts receivable from other government
Any other commitments
If disclosed individually, describe threshold to determine which to disclose
Describe when it can't disclose info
45
Q

Pollution remediation: obligation recognized when?

A

Government knows or reasonably believe a site is polluted
Obligating events occur
1. Imminent danger
2. Government violation
3. Government responsible for clean up
4. Government named in lawsuit
5. Commence or legally obligated to clean up

46
Q

How to calculate estimated liab for pollution remediation

A

A probability-weighted procedure

Estimate amount x %. Add all

47
Q

Intangible assets, internally generated computer software. 3 stages? What should be capitalized?

A

Preliminary project stage
Application development stage
Post-implementation/operation stage

Only application development stage

48
Q

Software modification later. When can it be capitalized?

A

Increased functionality
Increased efficiency
Extend its useful life

49
Q

Land held as investment by endowment: how to treat change in FV?

A

Investment income

50
Q

Derivatives: how to treat change in FV?

A

If investment derivative: as income

If hedging derivatives: deferred inflow of resources

51
Q

External investment pools: when can it be reported at amortized cost? (if doesn’t meet, FV).

A

Transact at a stable net asset value of $1 per share
Meets portfolio requirements
Meets shadow pricing requirements

52
Q

List 5 portfolio requirements

A

Maturity: mature less than 13 mo. Weighted average maturity less than 60days or less
Quality: By highest credit rating. No more than 3% in second highest category
Diversification: no more than 5% from one issuer (10% if there is credit support)
Liquidity: 10% in daily liquid assets. 30% in weekly
Shadow pricing

53
Q

Irrevocable split interest agreement: how to treat changes in FV. In case of government=intermediary and not.

A

+/- in remainder interest

+/- in deferred inflow

Lead interest or remainder interest.

54
Q

What are items that needs to be adjusted for government-wide stmt?

A

BS: Add Capital asset, accumulated depreciation, LT liabilities.
Dissolve internal service fund (don’t forget assets/LT liability has been already taken care of above. Just take Current assets/liabilities).
Eliminate internal balance.

Stmt of activities: Eliminate capital outlay expenditures. Add depreciation exp.
Eliminate transfers (other financial sources and uses).
Convert expenditures to expense, revenue to accrual basis.
Dissolve internal service fund profit (loss) to decrease (increase) expenses.

55
Q

Is transfers and internal loans recorded in the government wide stmt?

A

No.

56
Q

Bonds approved by voters for capital project. JE? Sold a bond and received cash: JE for fund level and G level?
Construction takes place: JE?

A

No entry.

F: Dr: Cash. Cr: Other financing source.
G: Dr: Cash. Cr: Bonds payable.

F: Dr: Expenditures. Cr: Cash or payable.
G: Dr: Building. Cr: Cash or payable.

57
Q

Pay loans: JE under debt service fund and G level?

A

F: Dr: Expenditure - Interest. Dr: Expenditure - Principal. Cr: Cash.
G: Dr: Interest expense. Dr: Bonds payable. Cr:Cash.

FAR (15 decks)

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