Chap002 - Essentials of Accounting for Governmental and...

Info iconThis preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
Essentials of Accounting for Governmental and Not-for- Profit Organizations Chapter 2: Overview of SLG Financial Reporting
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Overview of Chapter 2 Chapter 2 provides illustrations of state and local government financial reports introduced in Chapter 1 The slides that follow will emphasize points you should notice in the various statements. Ideally each student will obtain a full set of financial statements to review.
Background image of page 2
CAFR vs. Minimum Reporting The complete Comprehensive Annual Financial Report (CAFR) is recommended Some smaller governments may report less information, but that should include: 1. Management’s discussion and analysis 2. Basic Financial Statements (Government-wide, Fund Basis, and Footnotes) 3. Main differences Less statistical information Combining statements are omitted
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Parts of the CAFR The primary report is called the CAFR Comprehensive Annual Financial Report 3 main sections 1. Introductory 2. Financial section 3. Statistical section
Background image of page 4
1. Introductory Section Unaudited Includes Title page Table of contents Letter of transmittal Miscellaneous items such as organizational chart or names of chief government officers
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2. Financial Section Management discussion and analysis Paragraph format summary of most important issues during the year. Reviewed by auditor . Auditor’s report Financial Statements and Notes (audited) Required Supplementary Information (RSI) (reviewed by auditor) Combining statements — more details of main statements if needed
Background image of page 6
3. Statistical Section Not audited, often not financial in nature May include unemployment rate, level of education, etc. to attract new business May include population trends Miles of paved roads, number of fire stations and other nonfinancial information In short, anything the city feels may be of interest to users even if it is not of a financial nature
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Government Reporting Entity In business, parent companies generally include subsidiaries as part of consolidated statements in order to see the whole picture Likewise, if a primary government is financially accountable for another entity the “component unit” must be included as part of the primary government’s report This requirement prevents governments from creating separate units that hide part of the government debt or resources
Background image of page 8
Under GASB 14 there are three ways of assessing accountability: 1.Financial Benefit or Burden specifies inclusion when a primary government appoints a voting majority of the component unit's governing body and either bears a financial burden or receives a financial benefit from the component unit. The primary government may have guaranteed the component unit’s debt or agreed to subsidize its operations.
Background image of page 9

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Three ways of assessing accountability - continued 2. Fiscal Dependence exists if a component unit is “fiscally dependent” on the primary
Background image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 38

Chap002 - Essentials of Accounting for Governmental and...

This preview shows document pages 1 - 11. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online