Area 4 Flashcards
How to calculate Government-wide net position
Assets
+ Deferred outflows
- Liabilities
- Deferred inflows
= Net position
Note: Restricted assets are included as assets
Primary external users of government financial statements
Citizens of the reporting entity
Legislative and oversight bodies (ex. Advocasy groups, government accountability offices)
Investors and creditors (ex municpal bondholders)
Journal Entry to record budget for government entity when estimated revenues exceed appropriation
Debit: Estimated Revenues
Credit: Appropriations
Credit: Budgetary fund balance (for the difference - use this as a plug)
Acceptable presentation methods of a component unit in government financial statements
Discrete presentation - results presented in a distinct column on the face of the gov’t wide financial stmts
Blended presentation - results combined with primary gov’t and presented as an additional fund of gov’t
Note: which method to use depends on each unit’s relationship with the primary gov’t. Discrete is presented if certain criteria related to autonomy are met.
Restricted net position
Funds that are restricted by constituion, external resource providers, or legislation
Note: internal designations are reported as unrestricted component of net position as they are not restricted by the above sources
Governmental funds: classification of financial inflows
Revenues: All financial inflows not classified as other financing sources (Ex. Taxes, fines, licenses, permits, charges for services, grants, voluntary donations)
Other financing sources: certain financial inflows excluding revenues (Ex. Transfers in from other funds and proceeds of long-term borrowings)
3 types of government funds
Governmental (serving the public)
Proprietary (business-like)
Fiduciary (resources held for others)
Governmental Fund types
Permanent (assets with restricted principal)
Debt services (interest and principal payment)
Capital projects (major acquisitions)
Special revenue (earmarked source)
General fund (all other activities)
Proprietary Fund types
Internal service (goods and services to other funds)
Enterprice (goods and services to users for fees)
Fiduciary Fund types
Pension trust (employee pensions and retirement benefits)
Investment trust (resources invested on behalf of multiple agencies)
Private purpose trust (unclaimed tax refund)
Custodial (assets equal liabilities)
GASB Financial Statements Issued by type
Gov’t wide stmts: Statement of net positon; Statement of activities
Governmental funds: Balance sheet; Stmt of revenues, expenditures, and changes in fund balances
Proprietary funds: Stmt of net position; Stmt of revenues, expeneses, and changes in fund net position; Stmt of cash flows
Fiduciary funds: Stmt of fiduciary net position; stmt of changes in fiduciary net position
State and local government fund characteristic (accounting system and measurement focus by entity type)
Governmental funds: modified accrual; current financial resources
Proprietary funds: full accrual; economic resources
Fiduciary funds: full accrual; economic resources
Government-wide: full accrual; economic resources
What format must a proprietary fund use to report cash flow operating activies in the statement of cash flows?
Direct method
Note: unlike private business, GASB does not provide an option to prepare the operating activities section using the indirect method
