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21 Cards in this Set
- Front
- Back
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GASB Hierarchy
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1. GASB Statements and Interpretations
2. GASB Technical Bulletins and AICPA Industry Audit and Accounting Guides and Statements of Position cleared by GASB 3. AICPA Practice Bulletins cleared by GASB and consensus positions of groups of accountants organized by the GASB 4. Implementation guides published by the GASB staff and practices that are widely recognized and prevalent |
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Required Government Reporting (5 Components)
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1. Mgmt Discussions and Analysis
2. Gov't-wide F/ (Full Accrual) a. Statement of Net Assets b. Statement of Activities 3. Fund F/S a. Governmental Funds (modified Accrual) 1. Balance Sheet 2 Statement of Revenues, Expenditures (note), and Changes in Fund Balances b. Proprietary Funds (Full Accrual) 1. Statement of Net Assets (B/S) 2. Statement of Revenues, Expenses and Changes in Fund Net Assets (Fund Equity) 3. Statement of Cash Flows (no Indirect allowed) c. Fiduciary Funds (Full Accrual) 1. Statement of Fiduciary Net Assets 2. Statement of Changes in Fiduciary Net Assets 4. Notes to F/S 5. Required Supplementary Info (other MD&A) a. Schedule of Funding progress b. Schedule of Employer Contributions c. Budgetary Comparison Schedules d. Info about infrastructure Assets e. Claims Development Info when gov't sponsors a public entity risk pool ***Optional - Comprehensive Annual Financial Report (CAFR) 3 sections: 1. Intro 2. Financial (include 5 components) 3. Statistical (can be non financial info 4. Notes to F/S 5. Required Supplemental Info (other than MD&A) |
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5 Fund Balance Categories
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NON-SPENDABLE - can't be spent either not in spendable form (inventory, prepaid amounts, L/T amounts, property for resale - not looking to convert) or legally to be kept in tact
RESTRICTED- restricted to a specific purpose and reported as restricted....imposed externally COMMITTED - can only be used for specific purposed....Restrictions are permitted by gov't vs. outside party Assigned - amounts constrained by gov'ts INTENT (weaker than committed )to be used for specific purpose (not restricted or committed) UNASSIGNED- residual classification for the general fund...has not been committed under any other classification (this would be a surplus or deficit).....SO this means whatever the left over is will be unassigned whether positive or negative ***Only GENERAL Fund reports positive amount in unassigned fund balance*** |
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Modified Approach for recording eligible infrastructure Assets:
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These assets are still CAPITALIZED but Not Depreciated if both conditions are met:
1. Asset Mgmt System is used to manage infrastructure 2. Documented that assets are being preserved approximately at a condition (fair, well, excellent) level established and disclosed by gov't ***Must do a lot of extra reporting if this method is used (Required Supplementary Info)*** |
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Government-Wide Financial Statements
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Are done on Full Accrual Basis:
Statement of Net Assets -Primary Gov't made up of Governmental and Business-Type activities -Total column showed -Component Units are shown to the right of the total (called discretely presented) if activities ARE DISTINGUISHABLE from other activities..........If indistinguishable then Component Unit figures are included in total**** Statement of Activities -component units presentation is the same -Expenses shown first -Revenues are shown next -then Net Revenues, -then total and component unit next if distinguishable |
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Governmental Funds (Modified Accrual Basis - Focuses on current financial resources)
***5 Fund Balance Categories are within this fund*** |
1. General (always major - only can have one
a. default fund - if not the other goes into general fund 2. Special Revenue - to account for and report specific revenue sources that are restricted/committed to expenditures outside of debt and capital projects 3. Debt Service - restricted/committed to expenditures for long-term debt 4. Capital Projects - restricted/committed funds for capital outlays 5. Permanent - used to account for and report resources that are restricted to the extent that only earnings, used to support gov't programs - don't include private purpose funds (Fiduciary Funds) ***Fixed Assets and Long Term Debt not reported in Governmental Fund F/S*** ***if Assets, Liab., revenues, expenses of any individual government fund or enterprise fund constitute 10% and 5% of the gov't and enterprise fund combined = then this particular fund would be considered MAJOR*** ***General funds always major, but can only have one... |
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Proprietary Funds (Full Accrual Basis) - Focus on total economic resources:
Balance Sheet Statement of Revenues, Expense and Changes in Net Assets ***Cash Flow Statement*** |
6. Internal Service Fund - servicing other parts of the government
7. Enterprise Fund (Business-Type) - providing goods/services to external users for a fee ***Big thing on Proprietary is the Cash Flow Statement*** -Significant differences from GAAP (also differences from IFRS) |
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Fiduciary Funds (Full Accrual - Focus on the measure of economic resources)
Statement of Fiduciary Net Assets (like B/S) Statement of Changes in Fiduciary Net Assets (Uses Additions and Deductions vs. Revenues and Expenses) |
8. Agency
***These funds only report assets and liabilities and are EXCLUDED in the Statement of Changes in Fiduciary Net Assets 9. Pension and other employee benefit trust funds 10. Investments trust funds 11. Private-purpose trust funds ***Way to remember these is that fiduciary means acting on behalf of someone else...So far Agency or Trust Funds ***Also not included in Gov't-wide financials |
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Cash Flow Statement (for Proprietary Funds)
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Significant Differences:
-Indirect Method NOT Allowed -the reconciliation in disclosure is from Operating Income (not N/I like in FASB) -4 Categories of CF Stmnt. 1. Operating 2. Non Capital Financing 3. Capital and related Financing 4. Investing -Cash receipt of Interest is an Investing Activity -Would be Operating for GAAP -Would be Operating/Investing for IFRS -Cash payment for Interest is classified as a Financing/non financing activity -Remember FASB is Operating -Remember IFRS is Operating or Financing -Purchase of capital Assets are Financing(not investing like FASB/IFRS) Remember: IFRS puts payment of Interest (Operating for GAAP) and Dividends (Financing for GAAP) in Operating or Financing and Receipt of Interest and Dividends in Operating or Investing |
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Non-Exchanged Transactions
***Government-Wide F/S (Statement of Activities) |
Non-Exchangne Transactions
-4 Categories 1. Derived Tax Revenus - really just taxes that are derived from exchange transactions (like motor vehicle tax, payroll taxes, sales taxes) ***Tranx to get gas is taxed and is derived tax revenue 2. Imposed nonexchange transactions - not derived from another transactions ***these are imposed by the gov't, ex: property taxes, special assessments and fines and forfeits*** 3. Government-mandated nonexchange transaction - require receiving gov't to expend funds for a specific purpose ***requiring receiving gov't to do something and supplying a grant to help do so****required by law 4. Voluntary nonexchange transactions - Gov't ask receiving govt to do something ***this is optional for receiving govt (not required by law), but i take grant need to spend money on specific purpose ***REMEMBER 4 requirements for recognized revenue/receivables |
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Eligibility Requirements for recognizing Revenue/Receivable
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1. Required Characteristics of Recipient - have to be the right person (gov't)
2. Time Required - must be done within required time ***if promise is unconditional revenue/receivable recognized*** 3. Reimbursement Condition - revenue/receivable cannot be recognized until expense incurred ***pretty much a reimb. b/c money has already been spent for specific purpose and receivable would be reimb.*** 4. Contingency - any resources pledged that have a contingency cannot be recognized until contingency is removed ***Funds received prior to eligibility requirements be met would be DEFERRED REVENUE*** |
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Sale of Receivables
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Government can sale receivable similar to GAAP Gov't qualifies of Surrending Control...Following would prevent sale of Receivable:
-Gov't/buyer can cancel sale -Buyer cannot subsequently sell if wants to -Gov't has any continued involved with receivables and/or entity |
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Accounting for General Fund (Modified Accrual)
Remember CA - CL + FB (Fund Balance) |
Must set up budget if adopted - set up entries are established. Budgetary accounts are opposite of nominal accounts for General Fund
Encumbrance (dr) - when a order, purchase order is in place...not an accounting event for GAAP Closing entries - have to reverse out budget (original) and reverse out nominal accounts a. plug goes to fund balance (Dr = deficit, Cr = Surplus b. similar closing for Special Revenue Fund, also ***When materials or supplies are purchase = a adjusting journal entry is done to put these on the books and a reserve is credited in FB (this is under non-spendable - because not converting into cash) |
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Budgetary and Nominal Accounts for General Fund
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Nominal Accountants:
1. Revenues 2. Other Financing Sources 3. Expenditures 4. Other Financing Uses (no fixed assets or L/T Liab.) Budgetary Accounts: 1. Estimated Revenues (Dr) 2. Other Financing Sources (Dr) 3. **Appropriations (Cr) 4. Other Financing Uses (Cr) 5. Fund Balance (plug for Budget entry) ***Encumbrances (Dr) are debited and a reserve is credited when any order, purchase order, or contract is in place -reversed out when closing would be re-established in new year Budgetary Accounts are opposite of the Nominal Accounts |
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Accounting for Capital Projects
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-Do not have to set up Budget Entries
***Important to note here that any extra funds are transferred out to Debt Service Fund to service debits (any premium on bond, any interest earned if funds are temporarily transferred b/f project) Liabilities include Construction Payable and Constr. Payable - retainage....If bid price (which is what the encumbrance is debited for) is paid in installments, then that amount is reversed out of Encumbrance |
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Impairment of Capital Assets
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Similar to GAAP, Gov't must evaluate assets for impairment if:
A. The decline in service utility of the assets is large in magnitude, AND B. The event or change in circumstances is outside the normal life cycle of the capital asset If Impaired and no longer used by Gov't Asset should be report at LOWER of Carrying Value and FV -IF STILL USED BY GOV'T Impaired is measured by base way to determined diminished service utility ***NOTE - obviously since this is talking about capital assets it HAS to be ACCRUAL BASIS....Which cannot be any of the Governmental Funds*** |
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Progam Revenues
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1. Charges for Service
2. Operating grants and contribution 3. Capital grants and contributions **Not taxes levied for a specific function |
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Cash Flow Statement: (Direct Method) - Conversion of some accounts from accrual basis to cash basis
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1. Net Sales + the decrease of A/R (beg. - ending A/R) = Cash received from customers
2. COGS + change in inventory + decrease in A/P = Cash paid to suppliers 3. Operating expenses + change in ppd expenses + decrease in accrued expenses - depreciation/amortization = Cah paid for operating expenses ***Just know what balance sheet accounts are connected with the appropriate income statement accounts in converting accrual to cash basis for sake of cash flow statement |
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Deferred Taxes (Permenant Differences)
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1. State and municapl bond interest income
2. Life Insurance premium expense when corporation is beneficiary 3. Federal income tax expene 4. Payment of penalty or fine 5. Dividend received deduction (80%) |
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Not-for-Profit:
Health Care Organizations (Hospitals) - Statements Requred |
Balance Sheet
Statement of Operations Statement of Changes in Net Assets Statement of Cash Flows |
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Inherent Difficulty with Results of Operations in INTERIM PERIODS
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Cost that are expensed in one interim period but may provide benefit to another....these expenses may be allocated to the interim periods benefied
NOT anythig to do with cost of sales, depreciation in interim periods or L/T construction contracts |
