govt accounting chapter 2

chap 2

Annual Comprehensive Financial Report

governmental official annual report prepared and published as a matter of public record

What are the three main sections in the ACFR

Introductory

Financial Section

Stat section

Introductory Section has ?

Title page

table of contents

letter of trans

miscellaneous items

Financial Section has?

Management discussion and analysis

Auditor report - opinion

Financial stmts and notes

Required Supplementary Information

Stat Section has?

not audited

information is often not financial in nature

10 years of information

Component unit

are legally separate organizations for which the elected officials of the primary government are financially accountable

TJC foundation

A component unit is included in the financial report of a primary government if

two step process

1a) the primary gov controls a voting majority

1b) the organization is dependent upon the primary gov

2) a financial burden exists

GASB provide two methods for including component unit

discrete - put another column on the face of financials

blended - added onto govt activities

stmt of net position (b.s)

measures assets and liabilities using economic resource measurement focus

stmt of activities (i.s.)

measures revenues and expenses using the accrual basis

how many general funds

Only one general fund

major fund

Major fund concept

two conditions

1) total assets , liabilities, revenues, or expenditures constitute 10% of the total for the governmental fund

2) total assets , liabilities, revenues, or expenditures constitute 5% of the total of the governmental and enterprise categories combined

Deferred outflow of resources

balance sheet accounts with debit balances but are not assets

Deferred inflows of resources

balance sheet accounts with credit balances not liabilities

Management’s Discussion and Analysis

an overview of the government’s financial activities

does not it in the audit

Required Supplementary Information

it is required and entails some auditor responsibility but not as much as the basic financial stmts

net investment in capital assets

is computed by taking the capital assets minus accumulated depreciation and deducting outstanding debt related to the financing of capital assets

restricted net position

resources restricted by external parties

unrestricted net position

plug

The purpose of the ACFR

where we are headed before getting into the details of how this report comes together

governmental funds have

balance sheet

stmt of revenues, expenditures, and changes in fund balance

stmt of reconciliation

Proprietary funds have which financial stmts?

stmt of net postion

stmt of revenues, expenses, and changes in fund net postion

stmt of cash flows

fiduciary funds have which financial stmts?

stmts of fiduciary net postion

stmt of changes in fiduciary net postion

which of the following is true regarding the financial reporting entity of a state or local government?

many component units are discretely presented, rather than blended

T/F fiduciary funds use the economic resources measurement focus and accrual accounting

True