Chapter 5 and 6 - Chapter 5: Accounting for general capital...

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5.1 Chapter 5: Accounting for general capital assets and capital projects Proprietary funds (enterprise, internal service) and trust funds: Record their own fixed assets and debt For funds other than proprietary funds (i.e. enterprise, internal service) and trust funds: Different rules for government-wide statements and fund-based statements Options to meet GASB 34 dual perspective requirement (i.e. To provide government-wide statements and fund statements): 1. Use traditional fund accounting and make adjustments on a spreadsheet to create the government-wide statements 1. Balance sheet/statement of net assets: 1. Include general fixed assets, accumulated depreciation, general long- term liabilities, invested in capital assets net of related debt 2. Include internal service fund with the governmental funds 3. Adjust to accrual basis (vs modified accrual basis) 4. Offset due to/from loans 2. Statement of revenues, expenditures, and changes in fund balance/Statement of activities 1. Adjust to accrual basis (vs modified accrual basis) 2. Exclude effects of general assets acquired and long-term debt incurred, repaid 3. If general fixed assets sold: Adjust proceeds to equal gain/loss (adjust for basis of property disposed) 4. Include depreciation expense 5. Include internal service fund with the governmental funds 2. Use a dual track accounting approach (used in book) 1. Prepare simultaneous journal entries for the fund and Government activities (for the government-wide statements) 2. For Government activities (for the government-wide statements) 1. No budgetary journal entries 2. Classify as expenses (vs expenditures) 3. Record fixed asset and long-term debt activity using GAAP
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5.2 Rules re government funds under GASB 34: : 1. Government-wide financial statements 1. Show: 1. Fixed assets, net (i.e. less accumulated depreciation) 2. Noncurrent liabilities: 1. Due within one year 2. Due in more than one year 3. Invested in capital assets, net of related debt (reported in net asset section) 4. Depreciation expense included in Statement of Activities 2. Long term portion of debt (including lease obligations): Record in Governmental activities general journal 2. Fund financial statements: 1. Do not include fixed assets or long-term portion of debt 2. Asset purchases: classify as expenditures 3. If incur long-term debt: Classify as other financing sources 4. Record activity in proper fund: general fund, special revenue fund, capital projects fund, debt service fund (as applicable 3. Construction work in progress: 1. Expenditures recorded in Capital projects fund 2. Simultaneously recorded in Governmental activities general journal 4. Completed construction, other fixed assets: 1. Reclassify in Governmental activities general journal: 1. From: Construction work in progress 2. To: Building, building improvements, etc. Exhibit: General capital asset acquisitions:
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This note was uploaded on 02/19/2011 for the course MISC 101 taught by Professor Smith during the Spring '11 term at University of Louisiana at Lafayette.

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Chapter 5 and 6 - Chapter 5: Accounting for general capital...

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