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Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
Chapter 5 Part 2 - Governmental Financial Reporting
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Chapter 5 Part 2 - Governmental Financial Reporting

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  1. Governmental Financial Reporting The Reporting Entity Chapter 5 – Part 2
  2. The Financial Reporting Model <ul><li>Reporting model defines contents of external financial reports </li></ul><ul><ul><li>June 1999 = GASB No. 34 </li></ul></ul><ul><li>Current reporting model based on </li></ul><ul><ul><li>Accountability </li></ul></ul><ul><ul><ul><li>Fiscal </li></ul></ul></ul><ul><ul><ul><ul><li>Complied with revenue & expenditure decisions of public </li></ul></ul></ul></ul><ul><ul><ul><li>Operational </li></ul></ul></ul><ul><ul><ul><ul><li>How efficiently business-type activities met operating objectives </li></ul></ul></ul></ul><ul><ul><li>Information useful for decision making </li></ul></ul>
  3. The Financial Reporting Model <ul><li>Minimum reporting requirements for external general purpose financial statements </li></ul><ul><ul><li>Management’s Discussion & Analysis (MD&A) </li></ul></ul><ul><ul><ul><li>Classified as Required Supplementary Information </li></ul></ul></ul><ul><ul><li>Basic Financial Statements (BFS) </li></ul></ul><ul><ul><ul><li>Covered by audit opinion </li></ul></ul></ul><ul><ul><li>Required Supplementary Information (RSI) </li></ul></ul><ul><ul><ul><li>Other than MD&A </li></ul></ul></ul>
  4. Management’s Discussion & Analysis <ul><li>What MD&A IS </li></ul><ul><ul><li>Management’s responsibility </li></ul></ul><ul><ul><li>Discussion of basic financial statements </li></ul></ul><ul><ul><li>Condensed financial information </li></ul></ul><ul><ul><li>Analysis of SIGNIFICANT changes </li></ul></ul><ul><ul><ul><li>Financial position & results of operations </li></ul></ul></ul><ul><ul><ul><li>Individual fund balances & transactions </li></ul></ul></ul><ul><ul><ul><li>Capital assets & LTD </li></ul></ul></ul>
  5. Management’s Discussion & Analysis <ul><li>What MD&A IS </li></ul><ul><ul><li>Budget analysis of significant variances </li></ul></ul><ul><ul><li>Modified approach </li></ul></ul><ul><ul><li>Expectations </li></ul></ul><ul><ul><ul><li>Currently known facts & circumstances </li></ul></ul></ul><ul><ul><ul><ul><li>Impact on future </li></ul></ul></ul></ul>
  6. Management’s Discussion & Analysis <ul><li>What MD&A IS NOT </li></ul><ul><ul><li>Focused on single year </li></ul></ul><ul><ul><ul><li>GWS – comparative data permitted </li></ul></ul></ul><ul><ul><ul><li>MD&A – comparative data required </li></ul></ul></ul><ul><ul><ul><ul><li>Condensed financial information </li></ul></ul></ul></ul><ul><ul><li>Place to put just about anything </li></ul></ul><ul><ul><li>Boilerplate discussion & technical jargon </li></ul></ul>
  7. <ul><li>Government-wide financial statements </li></ul><ul><li>Fund financial statements </li></ul><ul><li>Notes to the financial statements </li></ul>Basic Financial Statements
  8. <ul><li>Government-wide financial statements </li></ul><ul><ul><li>Statement of Net Assets – page 150 </li></ul></ul><ul><ul><li>Statement of Activities – page 152 </li></ul></ul><ul><li>Fund financial statements </li></ul><ul><ul><li>Governmental – page 133 & 135 </li></ul></ul><ul><ul><li>Proprietary – page 142, 144, 145 </li></ul></ul><ul><li>Notes to the financial statements </li></ul>Basic Financial Statements
  9. Comprehensive Annual Financial Report (CAFR) <ul><li>Goes beyond GASB requirements for general purpose external reporting </li></ul><ul><li>Include non-GAAP information & GAAP based information </li></ul>
  10. CAFR – Introductory Section <ul><li>Table of contents </li></ul><ul><li>Letter of transmittal </li></ul><ul><li>Other material deemed appropriate by management </li></ul>
  11. <ul><li>Auditor’s report </li></ul><ul><li>Required by GAAP </li></ul><ul><ul><li>MD&A </li></ul></ul><ul><ul><li>Basic Financial Statements (BFS) </li></ul></ul><ul><ul><li>Required Supplementary Information (RSI) other than MD&A </li></ul></ul><ul><ul><ul><li>Budgetary comparison schedule </li></ul></ul></ul><ul><li>Combining & individual fund financial statements </li></ul><ul><li>Primary government & component units </li></ul>CAFR – Financial Section
  12. <ul><li>Required by GAAP if prepared </li></ul><ul><ul><li>Financial trends information </li></ul></ul><ul><ul><li>Revenue capacity information </li></ul></ul><ul><ul><li>Debt capacity information </li></ul></ul><ul><ul><li>Demographic and economic information </li></ul></ul><ul><ul><li>Operating information </li></ul></ul>CAFR – Statistical Section
  13. <ul><li>Established Certificate of Achievement for Excellence in Financial Reporting Program in 1945 </li></ul><ul><ul><li>Encourage & assist governments to go beyond minimum GAAP requirements </li></ul></ul><ul><ul><ul><li>Spirit of transparency & full disclosure </li></ul></ul></ul>GFOA CAFR Award Program
  14. <ul><li>Reports submitted are reviewed by </li></ul><ul><ul><li>Selected members of GFOA professional staff </li></ul></ul><ul><ul><li>GFOA Special Review Committee (SRC) </li></ul></ul><ul><ul><ul><li>Individuals with expertise in public-sector financial reporting </li></ul></ul></ul><ul><ul><ul><ul><li>Includes FS preparers, independent auditors, academics, & other finance professionals </li></ul></ul></ul></ul>GFOA CAFR Award Program
  15. Class Exercises – Part 2 <ul><li>Chapter Exercise 5-5 page 178 </li></ul><ul><li>NOTE: These are not part of your required assignment for this chapter. They simply represent things we will discuss in class for this part of Chapter 5. </li></ul>

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