FAR8 Flashcards
GASB
Governmental Accounting Standards Board
Standards for Not-for-Profit Organizations
FASB
Government-wide Presentations (consolidated f/s)
Full accrual accounting and Economic resources measurement focus
Governmental Funds (no profit motive)
Modified accrual accounting and Current resources measurement focus (no fixed assets or long-term debt): GRaSPP
General, Special Revenue, Debt Service, Capital Projects, Permanent Funds
Proprietary Funds (business enterprise)
Full accrual accounting and Economic resources measurement focus: SE
Internal Service Funds and Enterprise Funds
Fiduciary (Trust) Funds
Full accrual accounting and Economic resources measurement focus: PAPI
Pension, Agency, Private Purpose, Investment Trust Funds (no cash flows statements)
I/S Modified Accrual
Revenue is recognized when measurable and available, Expenditures are recorded when the related fund liability is incurred
I/S Full Acrrual
Revenue is recognized when earned, Expenses are recognized when incurred
Classification of Government Fund Balances: Constraints (NU CAR)
Nonspendable: prepaid expenses, inventories
Restricted: external authorities requirements
Committed: highest governing authority establishes limits
Assigned: intention without formal commitment
Unassigned: no constraint as to use (General fund = positive)
Governmental Funds (modified accrual)
Book: BAE (booked twice a year)
Budget, Activity, Encumbrances
Close: BAE (same amount)
Budget, Activity, Encumbrances
Budgetary Accounting “estimated accounts”
DR: Estimated revenue control
DR: Estimated other financing sources
DR: Budgetary control (negative/deficit)
CR: Appropriations control (approved $)
CR: Estimated other financing uses
CR: Budgetary control (postive/surplus)
(Opposite JE for ending period)
Activity (not matching principle)
Revenue: measurable and available (>60 days)
Expenditures: all spending (purchases)
Assets: expenditures
Debts: other financing sources (not CA/LTD)
Expenditure Recognition (purchase method)
DR: Expenditure (buying item)
CR: Vouchers payable
DR: Supplies Inventory (on-hand at year end)
CR: Nonspendable fund balance - inventory
Expenditure Recognition (consumption method)
DR: Supplies inventory (buying item)
CR: Vouchers payable
DR: Expenditure (use of item)
CR: Supplies inventory
Fixed Assets Gov’t funds
DR: Expenditure - capital outlay
CR: Vouchers payable (or cash)
Debts (long-term) Gov’t funds
DR: Cash CR: Other financing sources (bonds issued) DR: Expenditure - principal DR: Expenditure - interest CR: Cash
Remaining available appropriations
Budget: Appropriations
- Activity: Expenditures
- Encumbrances
Gov’t-wide Statement of Net Position (same as proprietary and fiduciary statements)
Assets + deferred outflows of resources
- Liabilities + deferred inflows of resources
= Net Position
Gov’t fund B/S
Assets + deferred outflows of resources
= Liabilities + deferred inflows of resources
+ Fund balance + Total liabilities, deferred inflows of resources, and fund balance
In order to qualify for hedge accounting treatment, a derivative
must be Effective
Imposed nonexchange revenue transactions recorded as receivable prior to the period when resources are required to be used
reported as deferred inflows
Incremental portion of current rates established at a level adequate to recover costs that are expected to be incurred in the future
displayed as deferred inflows of resources
Gov’t-wide f/s: Pensions
Either expensed (if changes result from service costs and interest net of return on plan assets)
Or Deferred outflows and inflows for changes in actuarial assumptions, differences between expected and actual, and prior service costs) but prior service costs already earned are EXPENSED
Deferred inflows
received or collected before performed or due
General Fund F/S
1) B/S (current assets + def. outflows = current liabilities + def. inflows + fund balance)
2) Statement of rev, expenditures, and changes in fund balance
3) required supplementary info: budgetary comparison schedule
Special Revenue Fund
legally restricted/committed for specific purpose: principal and interest (resources are expendable)
Grants - “monitoring”
Debt Service Fund
Pays off the debt of the gov’t funds
- Encumbrances is not applicable
Capital Projects Fund (purchasing department)
Established for the construction, purchase, leasing of significant fixed assets.
The life is short and limited to a construction period of 1-3 years
Capital Grants
Unrestricted gov’t grant:
DR: Cash
CR: Revenue “now”
Restricted gov’t grants (rev. when spent):
DR: Cash
CR: Revenue collected in advance “deferred”
Permanent Fund
Used to report resources that are legally restricted to the extent that only earnings (not principal, interest only) reported at FV
- Encumbrances is not applicable
Bond premium/discount
not amortized in its governmental funds
Internal Service Fund
Established to finance and account for services/supplies provided to other departments as its customer (includes fixed assets, long term debt, and depreciation)
Internal Service Fund: Net Position
Categories of equity: “RUN”
unrestricted, restricted (for purpose) and net investment in capital assets
Governmental Activities: Gov’t wide f/s
Gov’t funds (GRaSPP) + Internal Service Fund
Enterprise Fund (gov’t-wide business activities)
Used to account for operations that are financed/operated in a manner similar to private business enterprise (ex/ public hospital, lottery)
Municipal Landfills costs (MSWLF)
Liability: Cost of equipment expected to be installed, cost of gas monitoring, and cost of final cover (capping) = estimated is adjusted annually
Enterprise Fund Statement of Cash Flow
1) Cash flows from operating activities
2a) Cash flows from noncapital financing activities
2b) Cash flows from capital and related financing activities
3) Cash flows from investing activities
Reconcile to operating income (not NI)
Pension Trust
For government sponsored defined benefit and defined contribution plans and other employee benefits (fiduciary funds)
Agency Trust
Collects cash to be held temporarily for an authorized recipient to be disbursed later (no I/S): “no monitoring” or “not otherwise obligated” (fiduciary funds)
Current assets = current liabilities
Private Purpose Trust
The designated fund for reporting all other trust arrangements under which principal and income are the benefit of either: Specific individuals, Private organizations, Other governments (fiduciary funds)
Investment Trust
Established that a governmental entity that sponsors one or more external investment pools (sponsoring gov’t) should report the external portion of each pool as a separate investment trust fund (fiduciary funds)
