Governmental 2 Flashcards
All proprietary funds must present
A statement of cash flows
Depreciation expense
Is not recorded in the governmental funds but is recorded in the proprietary funds
Reduction in a liability
Results in a deferred INFLOW
For an investment trust fund the required financial statements are
Statement of fiduciary net position (balance sheet)
Statement of changes in fiduciary net position
(Income statement)
Governmental wide financial statements are presented using the
Economic resources measurement focus using the accrual basis
Statement of net position
And statement of activities
A CAFR (comprehensive annual financial report) is divided into 3 sections
Introductory
Financial
Statistical
Blended presentation
used when component unit is so intertwined with the primary government that it is a substance the same as the primary government.
Entities that are not legally separate entities are blended with the primary government
The basic financial statements and required supplementary information should consist of
Managements discussion and analysis (MDA)
Basic financial statements
And required supplementary information (RSI)
The reporting status of a governmental unit is determined by whether it can stand alone by its SELF
S- separately
E- elected governing body
L- legally separate entity
F- financially independent status
What is included in the introductory section of a local governments cafr
Letter of transmittal
Discrete presentation
Most common/ default method
Used when blended criteria not met.
Displays component units in separate columns
Government wide financial statements should classify net assets as
Net investment in capital assets
Restricted
Unrestricted
Under modified approach, infrastructure expenditures are respected as expenses except for
Outlays that result in addition sir improvements, which would be capitalized
Net position format
Assets and deferred outflows of resources
- liabilities and deferred inflows of resources
Categories of program revenue (SOC)
S- services (Charges for)
O- operating (grants and contributions )
C- capital (grants and contributions)
A governmental entity’s cash flow cash flow statement is only prepared for
Proprietary funds
BS adj. - net position from governmental activities (CANS)
Total gov. Fund bal \+ cap assets - accumulated depreciation - non-current liabilities (existing) -reduce deferred inflows - accrued interest payable \+ internal service fund net position
Operating statement adj. - change in net position of governmental activities (CPAS RIDES)
Net change in fund bal-total gov fund \+ capital outlay \+principal pmts on non current debt - assets disposals (net BV) - sources \+revenue (measurable but unavailable) - interest expense - depre exp \+ internal Service fund net rev
nfp services rendered
Only recognized SOMe if the time. services must meet 3 criteria
S specialized skill
O otherwise needed that can be
M measured
e easily
Government wide financial statements focus on
OPERATIONAL ACCOUNTABILITY
Proprietary funds must use what method ?
Direct method when preparing their statement of cash flows
Statement not required for NFPs
Statement of retained earning s
Cash contributions restricted by the donor for long-term purposes must be reported as
a cash inflow in the financing activities section
