Chapter 10D - Enterprise Funds Chapter 10 Learning...

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Unformatted text preview: Enterprise Funds Chapter 10 Learning Objectives Determine what activities should be reported using Enterprise Funds. Understand the Proprietary Fund accounting principles. Understand Proprietary Fund reporting for intergovernmental grant revenues and debt refundings. Review typical Proprietary Fund transactions. Understand the formats & classifications of Proprietary Fund financial statements. Understand and be able to compute the three components of Proprietary Fund Net Assets. Prepare the Proprietary Fund financial statements. Transition Chapter Leaving behind the new material: Governmental Fund Accounting & Reporting Moving to material that will look more familiar: Proprietary Fund Accounting & Reporting Common Characteristics & Principles Accounting Equation Accounting Principles Financial Statements Accounting Equation Other Noncurrent Assets Net Assets Current Assets Capital Assets + + Current Liabilities Long-Term Liabilities + + Traditional Balance Sheet Equation Net Assets Current Assets Other Noncurrent Assets Capital Assets + + Current Liabilities Long-Term Liabilities + New Net Asset Equation OR Accounting Principles Very similar to private sector counterparts Often use fixed budgets May cause activity to be accounted for on budgetary basis during the year Converted to GAAP basis at end of the year Legal or contractual reporting requirements that differ from GAAP met in CAFR or by issuing special purpose reports Accounting Standards for Proprietary Funds All Proprietary Funds follow: GASB Standards CAP Bulletins, APB Opinions, and FASB Standards through #102, unless pronouncement conflicts with GASB Standards GASB #20 requires governments to either Follow FASB Standards issued after #102, unless it conflicts with GASB Standards, OR Not to apply subsequent standards [usual choice] Financial Statements Statement of Fund Net Assets (or Balance Sheet) Statement of Revenues, Expenses, and Changes in Fund Net Assets (or Fund Equity) Statement of Cash Flows Statement of Fund Net Assets Two formats allowed: Traditional Balance Sheet format New Net Asset format Either way, statement must be classified Statement presents current and noncurrent assets and current and noncurrent liabilities similar to private sector What is different is the equity section Categories of Fund Net Assets Invested in Capital Assets, Net of Related Debt Restricted Net Assets Unrestricted Net Assets Contributed Capital and Retained Earnings no longer used Calculations of Net Asset Amounts Maintaining separate accounts during the year unnecessary amounts do not articulate with other financial statements Transactions may cause reclassifications among amounts entry to record unnecessary Amounts usually calculated at year-end Invested in Capital Assets, Net of Related Debt Historical cost of capital assets Accumulated Depreciation...
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Chapter 10D - Enterprise Funds Chapter 10 Learning...

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