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Chapter 3
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Chapter 3

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  • 1. State and Local Government Financial Reporting
    • Reporting Unit
      • Primary Government
        • State, General Purpose or Special Purpose Local Government that is legally separate and fiscally independent of other state or local governments
      • Component Unit
        • Legally separate organizations for which elected officials and primary government are financially accountable
        • Also, if exclusion would cause reporting entity financial statements to be misleading or incomplete
  • 2. Reporting Component Units
    • Blending
      • When organizations financial transactions are so intertwined that ‘in substance’ are the same as the primary government
    • Discrete
      • Most component units reported this way as a separate column following the ‘Totals’ column
  • 3. Comprehensive Annual Financial Report (CAFR)
    • Introductory Section
    • Financial Section
      • MD & A
      • Basic Financial Statements
        • Government-Wide (Level 1)
        • Fund (Level 2)
        • Notes to financial statements
      • RSI
    • Statistical Section
  • 4. Government-Wide Financial Reporting
    • Level One Financial Statements
    • Accrual Basis of Accounting
    • Economic Resources Measurement Focus
    • General Government Fixed assets and general long-term debt are reported in these statements
  • 5. Financial Statements-GW
    • Statement of Net Assets
      • Separate columns for Governmental Activities, Business-Type Activities, Totals, and Discretely Presented Component Units
    • Statement of Activities
      • Separate columns for expenses, program revenues, and net (expense) revenue for Governmental Activities, Business-Type Activities, Totals and Discretely Presented Component Units. (Pp. 32-33)
  • 6. Financial Statements-Fund
    • Governmental Type ( Modified Accrual/Flow of Financial Resources)
      • Balance Sheet
      • Statement of R, Expenditures , and Changes in FB
    • Proprietary Type ( Accrual/Economic Resources )
      • Statement of Net Assets (Balance Sheet)
      • Statement of R, Expenses , and Changes in Net Assets
      • Cash Flow Statement
    • Fiduciary Funds ( Accrual/Economic Resources )
      • Statement of Net Assets
      • Statement of Changes in Fund Net Assets
  • 7. Financial Reporting and Accounting
    • Reporting Peculiarities
      • GFA and GLTD included and reported only on G-W financial statements and Proprietary Fund Statements
      • Depreciation of GFA recorded in G-W Statement of Activities only
      • Enterprise Fund activities flow through to business-type activities on GW Statements
      • Internal Service Fund activities flow through to governmental activities on GW Statements
  • 8. Reporting, Continued
    • Internal Service Fund inter-fund transactions must be eliminated before put on GW financial statements
    • If the government has only business-type activities, then they need to prepare only Fund financial statements
    • Fiduciary Funds are not a part of GW Financial Statements
  • 9. Reporting, Continued
    • General Fixed Assets are reported as Capital Assets, net of Depreciation
    • Net Asset breakdown is
      • Invested in Capital Assets, Net of Related Debt
      • Restricted (Covenants or Law)
      • Unrestricted (Does not include internal designations)
    • General LTD reported in GW Statement of Net Assets
  • 10. Reporting, Continued
    • Reconciliation items
      • GFA and GLTD
      • Deferred Revenue
      • Unrecorded Liabilities (Unfunded Pension Liability)
      • Special items such as sale of land
    • What is reconciled
      • Fund balances Govt Funds to Net Assets
      • Ch in FB Govt Funds to Ch in Net Assets
  • 11. Reporting, Continued
    • Reconciliation Schedule is reported
      • Face of Fund Financial Statements, or
      • Notes to Financial Statements
    • Infrastructure must be capitalized and reported with other fixed assets
      • Retrospectively and Prospectively
      • Prospectively only for Less than $10 million revenue
  • 12. Reporting, continued
    • Infrastructure must be depreciated unless the ‘modified’ approach is elected
    • Collections and Works of Art may or may not be capitalized
    • Statistical Information
      • Schedule of changed in LTD
      • Annual DS requirements
      • Legal Debt Margin Schedule