Notes and Supplementary Information Flashcards
What is management’s discussion and analysis (MD&A)?
MD&A is part of the supplementary information required in government financial reporting; the MD&A is a narrative that provides a brief, objective, and easily readable analysis of the government’s financial activities based on currently known facts, decisions, and conditions
it provides the financial management of the government with the opportunity to present both a short-tern and a long-term analysis of activities; the following should be included:
description of the financial statements
identity of the primary government and discrete component units
economic conditions and outlook
major initiatives
Notes to the financial statements
notes to the financial statements are essential to fair presentation and considered integral to the financial statements; notes should focus on the primary government, specifically:
governmental activities
business-type activities
major funds
nonmajor funds in the aggregate
additional information regarding discretely presented component units
Required supplementary information (other than MD&A)
required supplementary information includes information that precedes the financial statements (the MD&A) and information included after the basic financial statements; significant information that follows the basic financial statements includes budgetary comparison reporting, infrastructure information, and pension information
What is budgetary comparison reporting?
the schedules must be prepared for the general fund and for each major special revenue fund that has a legally adopted annual budget and may be presented as either required supplementary information or in the basic financial statements
budgetary comparison schedules must show the original budget, the final amended budget, and actual amounts; both the computation of variances between budget and actual and the computation of difference between the original and the final amended budget are optional
budgetary comparison schedules should be prepared for the general fund and all special revenue funds that require a budget
What is infrastructure information?
the modified approach for reporting infrastructure assume significant required supplementary disclosures
required supplementary information for all eligible infrastructure assets reported using the modified approach should include schedules that disclose assessed condition of infrastructure and estimated annual amount to maintain and preserve infrastructure for each of the past five years
additional disclosures for infrastructure would include the basis for condition measurement and the condition level at which the government plans to maintain its infrastructure
What is pension information?
the following required supplementary information should be presented for each of the 10 most recent fiscal years:
sources of changes in the net pension liability (NPL)
information about the components of the NPL and related ratios
significant methods and assumptions used to calculate the actuarially determined contributions
annual money-weighted rate of return on pension plan investments for each of the 10 years presented
explanation of trends in amounts reported in the supplementary schedule such as: changes in benefit terms, changes in the population, and changes in assumptions
Other supplementary information (optional)
this includes: combining statements for nonmajor funds, variance between originally adopted budget and final amended budget, and variance between final amended budget and actual
