FAR 3 Flashcards
Who are the 3 primary user groups of the external financial reports of a state government?
Citizenry (citizens, media, advocate groups, public finance researchers), legislative and oversight bodies, and investors and creditors.
What are the four financial reporting implications associated with a government’s legally adopted budget?
- Expression of public policy, 2. Expression of financial intent, 3. Form of control, 4. May provide a basis for evaluating performance.
What does outcome measure?
Accomplishments or results that occur because of the services provided (i.e. percentage of fire alarms responded to within 5 minutes)
Two paramount objectives for financial reporting in government
- Accountability, and 2. Interperiod equity
Six characteristics of effective financial reporting per GASB Concept Statement No. 1:
- Understandability, 2. Reliability, 3. Relevance, 4. Timeliness, 5. Consistency, 6. Comparability
What are residual equity transfers?
Nonrecurring or nonroutine transfers of equity between funds.
Property tax revenue that is NOT available is reported how?
Reported in government-wide statements but not at the government fund level.
Elements of statement of financial position:
Assets, liabilities, deferred outflow of resources, deferred inflow of resources, net position
What are two types of proprietary funds?
Enterprise fund and internal service fund
Fiduciary fund types:
Pension trust funds, investment trust funds, private-purpose trust funds, and agency funds (remember the acronym PIPPA)
Describe “Expenditures” control account.
“Expenditures” control account is a temporary account debited during the year (like expenses are debited) as resources are expended (like assets are credited). Expenditures control is credited at the end of the year to close it (back to zero)
Are revenues recognized in modified accrual basis?
Yes, when the become available and measurable.
Describe “Estimated Revenues” control account.
“Estimated Revenues” is debited for X amount when the budget is adopted at the beginning of the year, and it is credited for the full X amount when the budgetary accounts are closed at year end.
Budgetary fund balance:
Difference between estimated revenues and transfers FROM other funds (debit) and the total of appropriations and estimated transfers TO other funds (credit). If, for example, revenues exceed appropriations, then the difference is credited, giving the budgetary fund balance a credit balance.
Appropriate budgetary fund balance classifications:
Nonspendable, restricted, committed, assigned, and unassigned. These are no longer “reserved” or “unreserved” and should be disclosed in the notes to the financial statements.
Book value of capital assets sold during the year:
Should be subtracted as it is spendable at the governmental fund level; only gains or losses are reported in the government-wide financial statements.
Special revenue fund account balance can be negative in which fund balance classification?
Unassigned.
If a transfer from another fund is for reimbursement due to an error, how is that classified?
As an “Expenditure Reimbursement”
Which fund has a “Nonspendable Fund Balance” for inventory of supplies?
General Fund
What are shared revenues received by an Enterprise Fund for operating purposes classified as?
Nonoperating revenues. These revenues do not result from ongoing activities of the Enterprise Fund.
