FAR Ch 8 - FAR - Notes Chapter 8 http:/cpacfa.blogspot.com...

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FAR - Notes Chapter 8 http://cpacfa.blogspot.com Governmental Accounting Overview Dual objectives – operational accountability and fiscal accountability Purpose – Fund accounting enables service and mission driven organizations to easily monitor and report compliance with spending purposes (restrictions) and spending limits (budgets) FASB sets standards for everything (including not-for-profit) except for government entities The Government Accounting Standards Board (GASB) sets standards for government entities The Government Accountability Office (GAO) governs audits under the federal “Single Audit Act” A fund – sum of money segregated for the purpose of carrying on a specific activity (fire or police department) or attaining certain objectives. Each fund is a self balancing set of accounts GASB 34 established a fund structure for governments using fund accounting to provide specific fund financial statements. Reporting requirements include fund bases and government wide presentations: there are three generic categories Governmental funds Proprietary funds Fiduciary funds Government wide presentation = consolidated F/S Major fund F/S’s = like segment reporting, only major funds presented, non major funds presented in aggregate - must reconcile between the two Governmental Funds – no profit motive Modified accrual accounting (I/S) - revenue recognized when measurable and available [means collectable within 60 days after year end] - Expenditures – recorded when liability is incurred Current financial resources measurement focus (B/S) - only current asses and current liabilities included Governmental fund types include G G eneral fund R Special R evenue funds a nd S Debt S ervice funds P Capital P roject funds P P ermanent funds GRaSPP – current only in F/S B/S: Current assets – current liabilites = fund balance Statement of Rev, expenditures and changes in fund balance (I/S): Rev – expenditures + other financing sources = net change in fund balance Proprietary Funds – treat like a customer Full accrual accounting (I/S) - revenue is recognized when earned - expenses recognized when incurred Economic resources measurement focus (B/S) 1
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FAR - Notes Chapter 8 http://cpacfa.blogspot.com - all assets and liab included on B/S. Net assets are reported as restricted, unrestricted and invested in property S Internal S ervice funds (maintenance department) E E nterprise funds (utilities, airports) SE - carry everything (fixed assets and LT debt) Statement of net assets: All assets – all liabilities = net assets Statement of Rev, expenses, and changes in fund net assets Operating rev – operating expenses + non operating revenue – non operating exp = change in net assets Fiduciary Funds – trust accounts Full accrual accounting - revenue is recognized when earned - expenses recognized when incurred Economic resources measurement focus (B/S) - All assets and liab included on B/S. Net assets are reported as restricted, unrestricted and invested in
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FAR Ch 8 - FAR - Notes Chapter 8 http:/cpacfa.blogspot.com...

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