FAR - GASB - Introduction

Question 1

Characteristics that drive Gov’t acct/reporting?

Answer 1

• no profit motive
• lack of clear ownership
• non-exchange services (contributors of resources don’t receive proportionate share of benefits)
• compliance w/laws & regulations
• formal budget process

Question 2

Types of Gov’t Entities

Answer 2

State & Local Govt’s:

• town, cities, county, parish, state gov’ts
• “general purpose govts”

Special Purpose Govts:
- school district, transit authorities

Agencies/Commissions:
- economic development, convention bureau

Question 3

Levels of authority

Answer 3

Level A: GASB statements/interpretations (officially established account principles)

Level B: 1) GASB Tech bulletins, 2) AICPA Industry Guides, 3) AICPA SOPs

Level C: AICPA practice bulletins

Level D: GASB Implementation Guides & widely recognized practices

Question 4

differences between not-for-profit and for-profit organizations?

Answer 4

1) Principal mission is to provide goods and services;
2) Primary resources are exchanged through non-exchange transactions;
3) Restrictions on resources;
4) No individual ownership interests

Question 5

true/false

One of the unique characteristics of government is its power to force involuntary financial resource contributions through taxation. No other form of organization has this power.

Answer 5

true

Question 6

Purpose of GASB Conceptual Framework

Answer 6

Provide framework for GASB in developing/revising standards

*Concept statements are NOT authoritative guidance

Question 7

5 Concept Statements

Answer 7

1) objectives of financial reporting
2) services efforts & accomplishments
3) financial reporting
4) elements of financial reports
5) service efforts & accomplishments amendments

Question 8

Objectives of financial reporting

Answer 8

1) Accountability

2) Interperiod Equity - current yr resources sufficient to pay current yr services?

Question 9

Characteristics of Financial Reporting

Answer 9

Timeliness
Relevance
Understandability
Comparability
Consistency
Reliability

“TRUCCR” (Trucker)

Question 10

Service Efforts & Accomplishments

Answer 10

Voluntary
- service efforts (inputs) - cost of fire dept

• service accomplishments:
  
  • Output: # fire alarms responded to
  • Outcome: % of alarms responded to
• SEA info should meet TRUCCR

Question 11

Financial Reports

Answer 11

Hierarchy of Reporting:

1) Recognition in basic financials
2) note disclosure
3) required supplemental info (RSI)
4) Other supplemental info (SI) (not required)

Question 12

Elements of Financials

Answer 12

1) Assets
2) Liab
3) Deferred Outflow of Resources
4) Deferred Inflow of Resources
5) Net Position

Question 13

True/False

interperiod equity is a basic component of accountability and fundamental to public administration

Answer 13

True

Question 14

four financial reporting implications associated with the legally adopted annual budget

Answer 14

(1) expression of public policy,
(2) expression of financial intent,
(3) form of control, and
(4) it may provide a basis for evaluating performance (if the government established service efforts and accomplishment goals as part of its budget process)

Question 15

true/false

adoption of a balanced budget supports interperiod equity because it is an attempt to ensure that the current generation of citizens does not shift the burden of paying for current-year services to future-years’ taxpayers

Answer 15

true

Question 16

primary users of the general purpose external financial report

Answer 16

1) citizens (Tax payers), 2) legislative/oversight bodies (schools), 3) Investors/creditors (bond insurers)