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8 Cards in this Set
- Front
- Back
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Name 3 examples of primary governments.
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State, general purpose local govt, special purpose govt
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What are the 3 requirements for a govt to be a primary govt?
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Have a separately elected governing body, be legally separate, be fiscally independent
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What is a Financial Reporting Entity?
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A primary govt and its component units
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What constitutes a component unit?
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Be fiscally dependent on the primary govt OR have the majority of its board be appointed by the primary govt AND the primary govt can impose its will on the other entity, OR significan financial burdens and benefits can be shifted from one entity to another, OR, the FS of the primary govt would be misleading by the exclusion of the other entity's financial information
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How should the primary govt display the financial information of a component unit?
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Blend the component unit's information when the component unit only provides services to that primary govt. Present the information discretely when the component unit provides services to that primary govt and other entities.
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How is information blended?
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The applicable balances of the component unit are included with the corresponding balances of the primary govt.
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How if information presented discretely?
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The component units' balances are aggregated in a single column to the right of the primary govt's financial information. If there is more than one component unit, individual stmts are also prepared detailing each component unit's information.
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What is a component unit?
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A legally separate entity for which the primary govt is financially accountable for OR for which the exclusion of the component unit's information from the primary govt's FS would be misleading.
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