Chat5 Proprietary Funds pc

Chat5 Proprietary Funds pc - ` Learning Objectives Afte...

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` Learning Objectives After studying Chapter 7, you should be able to: h Distinguish between the purposes of internal service funds and enterprise funds h Describe the characteristics of proprietary funds, including those unique to internal service and enterprise funds
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Reasons for use Enhances management of activities in which goods or services are provided on a cost-reimbursement basis to departments of the same government or to the general public on a user charge basis To compare benefits and costs of the business-type activities of a government Proprietary Funds
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Assets - Liabilities = Net Assets Proprietary Funds Accounting Equation Unrestricted Restricted (e.g., for payment of debt service ) Invested in Capital Assets, Net of Related Debt
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Use accrual basis Capital assets and long-term liabilities recorded within the funds Depreciation expense and accumulated depreciation are recorded and reported For accounting guidance look to accounting procedures used by similar type private enterprises Proprietary Funds— Accounting Characteristics
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Proprietary Funds— Required Financial Statements Similar to those of a for-profit entity : v Statement of net assets (or balance sheet) v Statement of revenues, expenses, and changes in fund net assets (operating statement) v Statement of cash flows (differs under GASB)
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Proprietary Funds A classified statement is prepared, with current assets shown in the order of liquidity Net assets are divided into three categories Invested in capital assets, net of related debt—calculated as the value of net capital assets less any outstanding debt related to capital asset acquisitions or construction Restricted—restrictions are placed on asset use by external parties through contracts, legal requirements, or donor stipulation
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Proprietary Funds GASB requires that revenues and expenses be identified as operating or non-operating Operating activities relate to the primary functions of the proprietary fund Separate subtotals are to be provided for operating information
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Similarities between GASB and FASB standards:
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Chat5 Proprietary Funds pc - ` Learning Objectives Afte...

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