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Governmental Accounting (Budgeting (Budget Estimates (Appropriation…
Governmental Accounting
Governmental Accounting Basics
Primary Objective
Provide information that is useful and benefits a wide range of users including
Cost of Services provided
Sufficiency of Revenues to cover costs
Financial Position of the Entity
GAAP Hierarchy for State & Local Government
Authoritative
Category A
GASB Statements
Category B
GASB Technical Bulletins
GASB Implementation Guides
GASB_Approved AICPA Literature
Non-Authoritative
GASB Concepts Statements
FASB Pronouncements / Other
Fund Types
Governmental Funds
Proprietary Funds
Fiduciary Funds
Fund Accounting Types (TWO)
Accrual Basis
CUrrent Economic Resources Focus
Revenue recognized when earned
Modified Accrual Basis
Current Financial Resources Focus
Revenues recognized when available and measurable
Budgeting
Budget Estimates
Appropriation
Highest amount allowed for an expenditure
Encumbrance
Records purchases and reserves it
Budget Actuals
Expenitures
Actual costs of something
Opening Budgetary Entry
Dr. Estimated Revenues Control
Cr. Appropriations Control
Dr/Cr Budgetary Fund Balance(plug)
Basically Estimated Revenues - Appropriations = Budget required to fill gap
Closing Budgetary Entry
Dr. Appropriation Control
Dr/Cr Budgetary Fund Bal (plug)
Cr. Estimated Revenues control
Reverse prior budgeting balance for new year
Governmental Funds (GSP-CD)
Uses Modified Basis of Accounting
Focus on Current Financial Resources
Revenue Recognized when available and measurable
Revenue Types
Derived Tax Revenue ("Do")
Buy a car?
Sales Tax
Sales Tax revenue received within 60 days after year-end are revenue if used to fund expenditures made before year-end
When people "do" things
Working?
Income Tax
Imposed Tax Revenue ("Exist")
Have a car?
Property Tax
Have a house?
Real Estate Tax
Recorded as Revenue when Budgeted
Ignores when it was SPENT
GSP-CD
General Fund
The Operating fund of the governmental unit
Records Significant Revenues
Taxes
Tickets
Fines
Licenses
Records Significant Expenditures
Police
Education
Fire Dept.
Special revenue Fund
Restricted for a special purpose
Like street repair
Permanent Fund
Legally Restricted
Only earnings can be used to fund programs
Principal must remain intact
Capital Projects Fund
Used to acquire and build facilities
Debt Service Fund
Handles repayment of long-term debt and related interest
Governmental Fund Balance Types
Restricted
(Strict) Contributor Restricted
Committed
(Less Strict) Government Restricted
Assigned
Has a intended use
UnAssigned
Available to be spent
Non-Spendable
Non-liquid state (Inventory)
Proprietary Funds
Use Accrual Basis of Accounting
Income Determination Oriented
Have an Economic Resource Focus
Revenue Recognized when earned and measurable not when available
Proprietary Fund Financial Statements (Only three)
Net Position
Revenue, Expenses, and Changes in Net Assets
Cash flows
Two Fund Types "IE"
Internal Service Fund
Serves the needs of other governmental units
Example: Motor Pool fixed governmental vehicles
Enterprise Fund
Provides goods or services to external users
Example: Post office
Fiduciary Funds
Four Types APIP
Agency Fund
Government is custodian
Just holds the money in the funds
Pension Trust Fund
Government is a trustee
Manages the pensions
Investment Trust Fund
Government is a Trustee
Manages investments
Private Purpose Fund
Trust that benefits various individuals and entities
Government manages money on behalf of individuals and entities
Accrual Basis
Economic resource focus
Earned > Available
Measurable
No need for cash flow statement
Only two statements
Statement of Net Position
Statement of Changes in Net Position
Government-wide F/S
Statement of Net Position (ADLD)
ADLD
Deferred Outflows of Resources
Future use of net assets
We are going to use those assets later
Assets
Deferred Inflows of Resrouces
Bring in money and now owe a service
Future increase in Net Assets
Liabilities
Net Asset Types
Restricted
Unrestricted
Capital Assets are net of debt
Asset Cost - ACD - Liabilites related to Asset = Net Asset
Activities Type
Government Activities
Business Activities
Infrastructure
Modified Approach
Reported at Cost
No ACD
Statement of Activities
Government activities divided by functions
Revenues
General Revenues
Program Revenues
Notes to F/S
Notes are considered part of the F/S
Presentation
Components can be distinguished from other governmental activities?
Yes
Discrete Presentation
No
Blended Presentation
Components are reported in the Entity-Wide F/S and not the Fund F/S
Statement of Net Position and Statement of Activities
Accrual Basis
Purpose is to provide Operational Accountability
Defined Benefit Pension Plans
F/S Required
Statement of Fiduciary Net Positon
ADLD
Asset
Deferred Outflows (A)
Liabilities
Deferred inflows (L)
Fiduciary Net Position
Statement of Changes in Fiduciary Net Position
Additions
Contributions
Net Investment Income
Deductions
Benefit Payments
Admin Expense
Net Change in Fiduciary Net Position
F/S Notes Required
Types of Benefits Provided
Plan Member Class
Board of DIrectors Information
Investments
Policies
Fair Value Determination