FAR 2 Flashcards
What basis of accounting and measurement focus is used for governmental funds?
Modified accrual basis of accounting; current financial resource measurement focus
What basis of accounting and measurement focus is used for proprietary/fiduciary funds?
Full accrual basis of accounting; economic resource measurement focus
What basis of accounting and measurement focus is used for government wide financial statements?
Full accrual basis of accounting; economic resource measurement focus
What are the elements of the financial statements?
“REGL ALE ID”
IS
1. Revenues - operating
2. Expenses - operating
3. Gains - non-operating
4. Losses - non-operating
BS
5. Assets
6. Liabilities
7. Equity
Excluded from comprehensive income
8. Investments by owners
9. Distributions to owners
What are the five steps of revenue recognition?
“ISTAR”
1. Identify contract with customer
2. Identify separate performance obligations
3. Determine transaction price
4. Allocate transaction price to separate performance obligations
5. Recognize revenue when satisfies each performance obligation
What are the three fair value approaches?
“MIC”
1. Market approach
2. Income approach
3. Cost approach
What are the four derivative instruments?
“OFFS”
- Options
- Forwards
- Futures
- Swaps
What are the four adjustments made to the operating activities section of the statement of cash flows using the indirect method?
“CLAD”
- Current assets and liabilities
- Losses and gains
- Amortization/depreciation
- Deferred items
What are the contributed services that do not enhance nonfinancial assets but are recognized?
“SOME”
Must meet three of the following criteria:
1. Specialized skills required and possessed by the donor
2. Otherwise needed by the organization
3. Measurable
4. Easily at fair value
What are the characteristics in financial reporting for government?
“U R MICE”
- Understandability
- Reliability
- Make a difference (relevance)
- In timeliness
- Consistency year over year
- Entity-to-entity comparability
What are the categories of governmental fund balances?
“U-NARC”
- Unassigned
- Non-spendable
- Assigned
- Restricted
- Committed
What are the adjustments to reconcile the governmental funds balance sheet to the net position from the governmental activities presented in the government-wide statement of net position?
“CANS”
Total governmental fund balance
+ Capital assets (existing and current)
- Accumulated depreciation
- Non-current liabilities
+ Eliminate/reverse deferred inflows
- Accrued interest payable
+ Internal service fund net position
= Net positional from governmental activities
What are the adjustments to reconcile the governmental funds statement of revenues, expenditures, and changes in fund balances to the change in net position of governmental activities presented in the government-wide statement of activities?
“CPAS RIDES”
Net change in fund balance - total governmental funds
+ Capital outlay
+ Principal payments on non-current debt
- Asset disposals (net book value)
- Sources (other financing sources - debt proceeds)
+ Revenue (measurable but unavailable)
- Interest expense (accrued)
- Depreciation expense
+ Internal service fund net revenue
= Change in net position of governmental activities
What items must underwater endowments disclose?
“FED”
- Fair value of the underwater endowment
- Endowment gift’s original amount
- Deficiency
What is the difference between a liquidating and a non-liquidating dividend in how they are recorded?
Non-liquidating: Record dividend income; increase to net income
Liquidating: Decrease investment account on balance sheet
DR: Cash
CR: Investment account
