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12 Cards in this Set

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Internal Service Fund
-Established to finance and account for services and supplies provided exclusively to other departments w/in a government unit or to other governmental units, typically on a cost-reimbursement basis.
-Other department / fund is customer (not citizens).
-Includes B/S (Statement of Net Assets), I/S (Statement of Revenues and Expenses), Statement of CF's, Footnotes
-SPACE (SE, PAPI, Accrual, Carry FA & LTD, Economic resource measurement focus).
Revenue Sources
1. Restricted Grant Revenues: recognized in the year money is spent.
2. Non-Operating Revenue: segregated from operating revenues for F/S display (ex: interest earnings).
3. Operating Revenues: billings for services provided, recognized when earned. DR. Cash (or due from other fund), CR. Billings to other departments (operating revenue)
Unique Accounting Issues
1. Accrual Accounting: record LTD and fixed assets as well as depreciation.
2. Budgetary accounts and encumbrances are not applicable.
3. Net Assets: classified in a manner consistent w/ proprietary funds and display 3 categories of equity: (1) unrestricted, (2) invested in capital assets net of related debt, and (3) restricted for debt service.
Establishing an Internal Service Fund
1. Contributions from other funds, recorded as an interfund transfer. DR. Cash, CR. Interfund transfer
2. Sale of "general obligation bonds" or capital leases, DR. Cash, CR. Long term bond payable.
3. Long term advances from other funds to be repaid from the earnings to the service (revolving) fund, DR. Cash, CR. Due to other fund.
4. Self-Insurance Funds: when government elects to establish these, the internal service fund is the appropriate fund.
Financial Statements
1. Statement of Net Assets: includes assets, current and noncurrent, as well as liabilities, current and noncurrent. Equals net assets separated into restricted, unrestricted, and invested assets.
2. Also require presentation of statement of revenues, expenses, and changes in net assets.
3. Statement of cash flows required as well.
4. Reconciling Item: Internal service funds are frequently combined w/ governmental funds for purposes of displaying governmental activities in the government-wide F/S's since they are often set up to primarily service the governmental funds of the government. Internal service fund net asset and changes in net assets are used as reconciling items between the total governmental funds and the government-wide F/S's.
Enterprise Fund
-(= customer, not citizen) used to account for operations that are financed and operated in a manner similar to private business enterprises. Activities are required to be reported as enterprise funds if any one of the following criteria are met:
-(essentially is going to charge a fee in order to recover its costs, examples are public utilities, hospitals, universities.)
1. The activity is financed w/ debt that is secured solely by a pledge of the net revenue from fees and charges.
2. Laws and regulations require that the cost of providing services be recovered through fees.
3. Pricing policies of the activity establish fees and charges designed to recover its costs.
Revenue Sources
-Revenues for enterprise (and all proprietary funds) must be presented by major source and distinguished between operating and non-operating.
1. Operating Revenue: (and expenses) defined by the main purpose of the fund.
2. Non-Operating Revenues: earnings or non-exchange transactions (taxes, certain fees) and interest.
-Shared Revenues: revenues collected by one government (ex: state) and shared on a predetermined basis w/ another government (ex: local). They are non-operating revenues of the local government.
Unique Accounting Issues
1. Accrual accounting: recording LTD and fixed assets, depreciation. Net assets (= equity)*
*Comprised of 3 parts: (1) Invested in capital assets, (2) Restricted for debt service, (3) Unrestricted.
-"SE PAPI" funds do not record budgets nor do they record encumbrances.
-Enterprise fund carries the following bonds: (1) Revenue bonds backed only by the proprietary fund, (2) Revenue bonds backed by proprietary fund w/ general obligation backing, (3) General obligation bonds paid w/ proprietary fund revenues.
Reporting, Statement of Revenues, Exchanges, Changes in Fund Assets
1. Revenue Valuation: revenues are reported net of discounts and allowance or reported gross w/ related discount or allowance amount on the face of the F/S.
2. Contributed Capital: displayed separately after non-operating revenues and expenses. Not shown on the face of the B/S.
3. Special and Extraordinary Items: special items are infrequent or unusual (not both), extraordinary are both. They are reported separately after non-operating revenues and expenses.
4. Transfers: displayed after contributions and special and extraordinary items.
Establishing an Enterprise Fund
1. Capital Contributions: reported as a separate category of revenue below the non-operating revenue and expense section of the operating statement. J/E for contributions: DR. Cash, CR. Interfund Transfers
2. Long-Term Debt (or capital lease): J/E to record issue of general obligation bond: DR. Cash, CR. LT Bond Payable
Municipal Landfills (the Dump)
-Accounting is governed by "Accounting for Municipal Solid Waste Landfill Closure (MSWLF) and Post-Closure Care Costs (GASB 18)." Refers to Environmental Protection Agency (EPA) rules and establishes standards of reporting and accounting for.
1. Reporting and Disclosure: "estimated total current cost of MSWLF closure and post-closure care to be recognized" needs to be disclosed.
2. Cost of Components: estimated total cost should include:
(1) Cost of equipment expected to be installed and facilities expected to be constructed near or after the date that the MSWLF stops accepting solid waste and during the closure period.
(2) Cost of a gas monitoring and collection system.
(3) Cost of final cover (capping) expected to be applied near or after the date the MSWLF stops accepting solid waste.
(4) This estimate should be adjusted annually. Under proprietary fund reporting, a portion of this estimated cost is recognized as an expense and as a liability, based on usage, each period the MSWLF is operating. All costs are recognized as of the date of closure.
(5) Purchases of equipment anticipated by the liability accrual reduce the liability and do not increase assets.
-Just like depletion: Residual + Estimated Cost to Close + Additions + Land (REAL)
Financial Statements
1. Statement of Net Assets: (1) Assets, current and noncurrent, (2) Liabilities, current and noncurrent, (3) Net assets, invested, restricted, and unrestricted.
2. Statement of Revenues, Expenses, and Changes in Fund Net Assets: operating revenues, operating expenses, and non-operating revenues (expenses).
3. Statement of Cash Flows: (1) CF's from operating activities, (2A) CF's from noncapital financing activities, (2B) CF's from capital and related financing activities, (3) CF's from investing activities.
-"Reconciliation of operating income (loss) to net cash provided (used) by operating activities" is included at bottom.