Governmental Financial Reporting The Reporting Entity

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  • 1. Governmental Financial Reporting The Reporting Entity Chapter 5 – Part 4 Government-wide Statements, RSI & Notes
  • 2. Review of the Financial Reporting Model & Fund Financial Statements Chapter 5 – Part 2 & 3
  • 3. The Financial Reporting Model
    • Financial reporting model defines contents of external financial reports
      • June 1999 = GASB No. 34
    • Current reporting model based on
      • Accountability
        • Fiscal
          • Complied with revenue & expenditure decisions of public
        • Operational
          • How efficiently business-type activities met operating objectives
      • Information useful for decision making
  • 4. The Financial Reporting Model
    • Minimum reporting requirements for external general purpose FS
      • Management’s Discussion & Analysis (MD&A)
        • Classified as Required Supplementary Information
      • Basic Financial Statements (BFS)
        • Covered by audit opinion
      • Required Supplementary Information (RSI)
        • Other than MD&A
  • 5.
    • Government-wide financial statements
      • Statement of Net Assets
      • Statement of Activities
    • Fund financial statements
    • Notes to the financial statements
    Basic Financial Statements
  • 6. Comprehensive Annual Financial Report (CAFR)
    • Goes beyond GASB requirements for general purpose external reporting
    • Include non-GAAP information & GAAP based information
  • 7. Fund Level Financial Statements
    • Short-term focus - financial accountability
    • Reported based on type of fund
      • Governmental funds - modified accrual
      • Proprietary funds - essentially same as for-profit entities
    • Information on fund level financial statements must be reconciled to information reported in GWS
  • 8. Fund Level Financial Statements
    • Present all categories of funds
      • Governmental
      • Proprietary
      • Fiduciary
  • 9. Fund Level Financial Statements
    • Presented for major funds & nonmajor funds in the aggregate
      • Page 131
        • Two governmental fund financial statements
        • Three proprietary fund financial statements
        • Two fiduciary fund financial statements
  • 10. Major Funds
    • General
      • Always general fund
      • May designate additional funds as major
      • ISF never major fund
    • A two step process
      • 10% test
        • Item for fund type
      • 5% test
        • Same item for all fund types
  • 11. Government-wide Statements Required Supplementary Information Footnotes Chapter 5 – Part 4
  • 12. Government-wide Statements
    • Statement of net assets – page 150
      • Columnar approach
      • Net assets
        • Invested in capital assets net of related debt
        • Restricted
          • Legal
          • Contractual/external
        • Unrestricted
  • 13. Government-wide Statements
    • Statement of activities – page 152
      • Expenses by function
        • Allocation of direct expenses required
          • Includes depreciation
          • Interest on LTD MAY be allocated
      • Revenues by category – dictated by revenue source
        • General
          • Taxes even if restricted to specific program
          • Income from government itself
        • Program
          • Charges for services
            • Not from citizens may be general if not program restricted
          • Program-specific operating & capital grants
  • 14. Government-wide Statements
    • Statement of activities – page 152
      • Revenues by category
        • General
        • Program
          • Charges for services
          • Program-specific operating & capital grants
        • Source of revenue dictates category
  • 15. Required Supplementary Information
    • MD&A
    • Budgetary information – page 154
      • Option to include as part of BFS
      • Minimum reporting
        • Original & final budget
        • Actual on budgetary basis
        • Funds
          • General fund
          • Major special revenue funds with legally adopted budget
    • Modified approach to infrastructure
      • Assessed condition
      • Cost to maintain at adopted condition levels
  • 16. Footnotes to Required Financial Statements
    • Summary of significant accounting policies
    • Cash & cash equivalents
    • Investments
    • Policies (capitalization, operations, etc.)
    • Capital assets (balances & changes therein)
    • Long term debt (balances & changes therein)
    • Interfund transactions & balances
    • Pensions & OPEB
    • Subsequent events
  • 17. Required Exercises – Chapter 5
    • Problems pages 180 & 181
    • 5-4 5-8 5-11
    • 5-5 5-9
    • NOTE: These ARE part of your required assignment for this chapter. Please have them ready to hand in at the beginning of the designated class.