Chapter_2_Funds Accounting Precise

Chapter_2_Funds Accounting Precise - GOVERNMENTAL FUNDS...

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GOVERNMENTAL FUNDS Fund Balance; account category unique to governmental funds; is the difference between assets and liabilities of fund. Term is only used for governmental funds; for all other funds and government wide statements, difference is called net assets. Because only current financial resources and claims against those resources are recognized in these accounts, the Fund Balance represents the net resources of the fund that are currently available for future spending. Current financial resources vary in the extent to which government managers have discretion over their future use. Therefore, the Fund Balance is classified according to five categories based upon this criterion. Classifications of Fund Balance 1. Nonspendable Fund Balances; Represent resources that appear in governmental funds because they are current assets but are nonspendable because they are used in operations rather than converted to cash. 2. Restricted ; funds constrained to specific purposes by their providers, (external parties or law) via constitutional provision, or enabling legislation; may also arise from requirements that resources by used only for specific purposes. E.g., taxes on sale of prepared food with tax proceeds restricted to use for education. 3. Committed; net resources that a governing body has specified for a particular use; difference between restricted and committed is that committed constraint is imposed by the government upon itself. 4.
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Chapter_2_Funds Accounting Precise - GOVERNMENTAL FUNDS...

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