1. Under GASB standards, agency funds are excluded from the face of the government-wide financial statements.
What are agency funds?
Agency funds are used to account for assets held for distribution by the government as an agent for another entity for which the government has custodial responsibility and accounts for the flow of assets. For example, the state collects sales tax funds on behalf of a city. These funds are considered agency funds – the state acts as the custodian for these funds, which are labeled for eventual transfer to the city. Agency funds have to equal liabilities since there are no revenues, expenses or fund balances. The assets do not belong to the reporting agency and must be zeroed out at the end of the fiscal year. …show more content…
Government-wide states are what bring financial activity together in one location and report accrual-based pecuniary resources information. These statements organize material by whether it relates to governmental activities or business-type activities. Government-wide statements do not include agency funds since the resources they account for do not belong to the government. Governmental activities and business-type activities are combined to represent the entire primary government. Furthermore, independently presented components (legal separate entities for which the primary government is accountable) are presented in the notes of the government-wide statements but are not included in the final total of the primary government, because agency funds cannot be used to support the primary government’s activities or programs.
Could agency funds--or should they--be presented elsewhere?
No. GASB 34 requires agency funds should remain on The Statement of Revenues, Expenditures, and Changes in Fund Balances because the primary government cannot use agency funds to support its programs. Fund financial statements comprise of various statements, which focus on information about the government’s funds. They include agency funds, which use accrual basis accounting. However, since they are fundamentally custodial accounts they do not use a measurement focus.
2. How do the three major financial statements of a public college or university differ from those of a private not-for-profit college or
What are agency funds?
Agency funds are used to account for assets held for distribution by the government as an agent for another entity for which the government has custodial responsibility and accounts for the flow of assets. For example, the state collects sales tax funds on behalf of a city. These funds are considered agency funds – the state acts as the custodian for these funds, which are labeled for eventual transfer to the city. Agency funds have to equal liabilities since there are no revenues, expenses or fund balances. The assets do not belong to the reporting agency and must be zeroed out at the end of the fiscal year. …show more content…
Government-wide states are what bring financial activity together in one location and report accrual-based pecuniary resources information. These statements organize material by whether it relates to governmental activities or business-type activities. Government-wide statements do not include agency funds since the resources they account for do not belong to the government. Governmental activities and business-type activities are combined to represent the entire primary government. Furthermore, independently presented components (legal separate entities for which the primary government is accountable) are presented in the notes of the government-wide statements but are not included in the final total of the primary government, because agency funds cannot be used to support the primary government’s activities or programs.
Could agency funds--or should they--be presented elsewhere?
No. GASB 34 requires agency funds should remain on The Statement of Revenues, Expenditures, and Changes in Fund Balances because the primary government cannot use agency funds to support its programs. Fund financial statements comprise of various statements, which focus on information about the government’s funds. They include agency funds, which use accrual basis accounting. However, since they are fundamentally custodial accounts they do not use a measurement focus.
2. How do the three major financial statements of a public college or university differ from those of a private not-for-profit college or