F9: Governmental Accounting (Part B) Flashcards
GASB 34 requires the presentation of what?
- Basic financial statements
- Required supplementary info
Basic financial statements definition
- Government-wide financial statements
- Fund financial statements
- Notes to the financial statements
Other required supplementary info includes what?
- Management’s discussion and analysis
- Other schedules
Where is MD&A shown?
Before the basic financial statements
Governmental reporting focuses on what two types of accountability?
1- Operational Accountability
2- Fiscal Accountability
What is the focus of government-wide financial statements?
Operational Accountability
What is Operational Accountability?
The extent to which the government has met its operating objectives efficiently and effectively and the extent to which it can continue to meet its objectives
What is the focus of fund financial statements?
Fiscal Accountability
What is Fiscal Accountability?
Shows that the government entity’s actions in current period have complied with public decisions
CAFR stands for what?
Comprehensive Annual Financial Report
CAFR definition
A section that adds an:
- Intro section (before basic financial statements)
- Statistical section (after basic financial statements and supplemental required info)
Is CAFR required?
No
What is included in the Intro Section of CAFR?
- Letter of transmittal
- Organizational chart
- List of principal officers
What is included in the Statistical Section of CAFR?
- 10 years of selected financial data
- 10 years of economic data
- Other data
The primary government consists of what?
All organizations that make up the legal government entity
The primary government is considered the _______ of the financial reporting entity
Nucleus
Types of Primary Government Entities
- State governments
- General purpose local governments
- Special purpose local governments that meet SELF criteria
SELF stands for what?
SE- has a Separately-Elected governing body
L- is Legally separate, and
F- is Fiscally independent of other state/local governments
What is a component unit?
-An organization for which the elected officials of the primary government are financially accountable
OR
-An organization that cannot be excluded from the primary government’s statements without making them incomplete
Two ways to present a component unit
1- Blended Presentation
2- Discrete Presentation
What is Blended Presentation?
-When a component unit is so entwined with the primary government
Examples of units requiring blended presentation
- A board of the component unit is substantively the same as that of the primary government
- Component unit serves the primary government exclusively (or almost)
- Component unit is not a separate legal entity
Units requiring discrete presentation
When the requirements of blended presentation are not met
Which type of presentation of component units is most common?
Discrete presentation
Examples of NFP units that can be presented as a component unit (because they provide ongoing support to the primary government)
- Private foundations associated with state universities
- Private foundations associated with public health care facilities
Legally separate, tax-exempt organizations should be recorded as discrete if ALL the following 3 standards are met:
1- Benefit standard
2- Access standard
3- Significance standard
Definition of Benefit Standard
Resources held by the tax-exempt organization are for near-exclusive benefit of the primary government
Definition of Access Standard
Primary government has access to a majority of the resources held by the tax-exempt organization
Definition of Significance Standard
Resources held by the tax-exempt organization are significant to the primary government
