Chp_10_Homework

Chp_10_Homework - Chapter 10 - Analysis of Governmental...

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Chapter 10 - Analysis of Governmental Financial Performance CHAPTER 10: ANALYSIS OF GOVERNMENTAL FINANCIAL PERFORMANCE Answers to Questions 10-2 Economic condition is the term the GASB uses to represent “… a composite of a government’s financial health and its ability and willingness to meet its financial obligations and its commitments to provide services.” This concept is broad enough to include financial position (a measure of liquidity or the relationship between current financial resources and obligations to be paid from those resources) and fiscal capacity and service capacity. Financial condition, as used by the ICMA, is broader than financial position and includes various measures of long-term solvency and the ability to sustain services indefinitely into the future. 10-3 The four types of solvency the ICMA describes are 1) cash solvency, 2) budgetary solvency, 3) long-run solvency, and 4) service-level solvency. If a government does not have cash solvency it will not have enough cash over a 30- or 60- day period to pay its
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Chp_10_Homework - Chapter 10 - Analysis of Governmental...

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