Exam 3 Flashcards
What is the (1) measurement focus and (2) basis of accounting in proprietary funds and fiduciary funds?
- Economic resources
- Full accrual basis
What are the 3 requirements for enterprise funds? How many must be met?
- Debt secured only by the activity’s net revenues
- L&R requires that activities performed need to recover the costs of providing services with fees or charges
- Pricing intended to recover costs
Only one needs to be met.
What is the difference between internal service funds and enterprise funds?
Internal service funds serve and charge various departments of government (same or neighbor) while enterprise funds serve and charge external users.
What are the 3 financial statements for proprietary funds?
- Statement of net position
- Statement of revenues, expenses, and changes in net position
- Statement of cash flows
What are the 5 components of GASB that makes it different from FASB?
- Modified approach is allowed
- Leases are considered short/long term
- Capital asset impairment is based on cost of repairing service portion
- Fiduciary activities are reported
- Report deferred inflows and outflows of resources
What are the 5 components of FASB that makes it different from GASB?
- Modified approach not allowed
- Leases are considered financing/operating leases
- Capital asset impairment based on expected future cash flows from the asset
- Fiduciary activities not addressed
- Don’t reported deferred inflows and outflows, use other comprehensive income
What is the formula for defined benefit plans?
(Annual and monthly)
Annual = Last full salary x years employee worked for government x benefit multiplier
Monthly = Annual pension benefit / 12
When an employer promised to provide retirees with a defined future benefit over a future period of time.
Define Benefit Plan
When government contributes a certain percentage of an employee’s salary to an account in the employee’s name.
Defined Contribution Plan
What is the formula for defined contribution plans?
(Annual and monthly)
Annual = salary x contribution percentage
Monthly = (salary x contribution percentage)/12
A fund that is used with external pools. An arrangement that pools the resources of more than one legally separate government and invests them on the governments behalf to achieve economies of scale.
Investment Trust Fund
What are the 3 criteria for an activity to be accounted for in an investment trust fund?
- Government controls the assets associated with the activity
- Associated assets are not derived either from government revenues or mandated or voluntary nonexchange transactions
- Assets from activity are held in trust
What are the 3 criteria for investment trusts that hold activity assets?
- Assets are administered through the trust, with the government NOT seen as the beneficiary
- Assets are dedicated to provide benefits to associated parties
- Assets are legally protected from creditors
Assets associated with the activity are administered through a trust where principal and earnings are maintained for the benefit of those OUTSIDE the government - individuals, organizations, and other governments.
Private-purpose Trust Fund
What are the 2 financial statements for fiduciary funds?
- Statement of fiduciary net position
- Statement of changes in fiduciary net position
