M3 - Form and Content of the Comprehensive Annual Financial Report Flashcards
What is the measurement focus and basis of accounting for the government-wide financial statement?
Measurement focus - Economic Resources
Basis of Accounting - Accrual
What is the measurement focus and basis of accounting for the governmental fund financial statement?
Measurement focus - Current Financial Resources
Basis of Accounting - Modified Accrual
Stand alone business-type activities are accounted for as an enterprise fund and would include both basic F/S and required supplementary information consistent with GASB #34 guidance. What are the required statements for enterprise funds?
- Statement of net position (balance sheet)
- Statement of revenues, expenses, and changes in net position (income statement)
- Statement of cash flows
- Footnotes
In Addition
- Management’s Discussion and Analysis (MD&A)
- Required Supplementary Information (RSI)
The fund F/S and the “government-wide” F/S would be identical so they would only be presented once.
What is the basic criterion used to determine the reporting entity for a governmental unit?
Financial Accountability
An accountability perspective provides the basis for defining the financial reporting entity.
Government-wide financial statements focus the reader on accountability in which ways?
Operational Accountability
Government-wide F/S focus on the operational accountability of the government. Operational accountability takes an economic view that reports on the long-term efficient and effective use of resources.
Government Fund financial statements focus the reader on accountability in which ways?
Fiscal Accountability
Fiscal accountability takes a short-term view that focuses the reader on compliance and current year performance.
Government reporting standards established by GASB 34 require presentation of basic F/S and required supplementary information. Basic F/S are defined as:
- Government-Wide F/S
- Fund F/S
- Notes to the financial statements
Supplementary information covers a wide range of information including management’s discussion and analysis and supporting schedules, such as combining financial statements by fund type and budget versus actual presentations.
The joint presentation of government-wide and fund financial statements and appropriate reconciliation is called the what?
The integrated approach
A comprehensive annual financial report is divided into 3 sections: an introductory section, the basic F/S along with other required supplementary information mandated by GASB 34, and the what?
Statistical Section,
By definition, the statistical section, is not part of the basic financial statements.
- Statistical tables generally provide 10 years of historical financial information.
- Statistical tables include a variety of accounting and non-accounting data including property values, tax rates on overlapping governments, demographic statistics, etc.
- The statistical tables are not viewed as an integral part of the basic F/S.
True or false: Fiduciary activities should be excluded from government-wide measures of operational accountability since fiduciary resources cannot be used to support the government’s programs or other services
True
Governmental Type, Business Type, and Component Units are specifically included in the statement of activities.
The focus of government-wide F/S is the government’s responsibility to report the extent to it has met its operating objectives efficiently and effectively, using all resources available for that purpose, and the extent to which it can continue to meet its objectives for the future. (true or false)
true
The government-wide F/S include a statement of net position and statement of activities prepared using the economic resources measurement focus and the accrual basis of accounting distinguishing between governmental and business-type activities. (true or false)
True
Primary government entities include:
-State governments
-General Purpose Local Governments (e.g., a city or a county)
-Special purpose local governments (e.g., a hospital authority or a school district-a governmental unit that has a single or special purpose) that meet all the following criteria:
- Separately Elected governing body
- Legally separate
- Fiscally independent of other state & local governments
(SELF)
* Primary governments reports by “ItSELF”
SELF test to see if it is a primary government entity:
-Separately Elected governing body
-Legally separate
-Fiscally independent of other state & local governments
(SELF)
* Primary governments reports by "ItSELF"
If failure to meet SELF test, use the blended method to report entity.
Blending is used when the component unit is so intertwined with the primary government that it is in substance the same as the primary government. One indication of a component unit’s blending with the primary government is its failure of the “legal entity” test. Entities that are not legally separate entities are blended with the primary government. (true or false)
True
