Essay about Final Notes

Submitted By hrsmith22
Words: 2417
Pages: 10

Final Notes: Areas to Concentrate:

Purpose of governmental financial statements:
Governmental financial reporting focuses on stewardship and accountability for how public resources are raised and used to provide services.
Modified accrual vs. accrual basis of accounting:
Full accrual is when revenues recognized when earned; expenses recognized when incurred. Modified accrual is when revenues recognized when available and measureable; expenditures when incurred.
Current vs economic financial focus:
Economic resources measurement focus reports on the determination of net income, financial position, and cash flows (capital maintenance). Current financial resources measurement focus reports on the inflows and outflows of current financial resources (cash or other items expected to be converted into cash during the current period). To measure fiscal accountability; meet the legal and budget needs of government.
Budgetary accounting recording:
Only in governmental accounting is budget activity formally recorded. Appropriations are authorizations to spend as well as limits on spending. Recording budget activity: helps ensure compliance with spending limits. Enables reporting to help management adjust to revenue shortfalls. Accounts are all temporary and exist in the accounting system to "control" temporary accounts.
Interfund transactions:
Type 1: one fund loans cash to another. Less than one year: use due to/ due from. Longer than one year: use advance to / advance from. And in the advance to fund record a reservation of fund balances for the interfund advance. For instance if the GF loaned the CPF money for more than one year: the general fund would record:
Type 2: interfund services provided and used. Exchange or exchange like and quasi external transactions. Quasi external: business within government itself. Recorded as if happened outside the government. Revenue and expenditure/expense.
Type 3: reimbursements. Correct coding errors. GF makes expenditure on behalf of other funds—then allocates to these funds.
Type 4: financial resources transferred with no intention of repayment. Receiving fund records OFS—interfund transfers in. giving fund records
OFU—interfund transfers out.
Internal exchange transactions:
Transactions between 2 funds that is similar to those involving the government and an external entity. (Billing from a city's water utility to the city's GF. The 2 funds recognize revenue and expenditure/expense rather than interfund transfers in/out.

fund balance classifications GASB 54:
GASB's research revealed that the existing standards guiding fund balance reporting were being interpreted inconsistently by different governments. The fund balance information reported by many governments was inconsistent. The understandability of fund balance information was affected and that financial statement users were unable to readily interpret reported fund balance information. At the b/s date THE fund balance would be presented in the following classifications based on GASB 54: non spendable, restricted, committed, assigned, and unassigned.
OPEB (other post employment benefits:
Financed on a cash basis after their employees retire. has a major effect on the fund financial statements.
What do we mean by accountability?
Accountability arises from citizen’s right to know" it imposes a duty on public officials to be accountable to citizens for raising public monies and how they are spent.
How does "interperiod equity" relate to accountability?
Interperiod equity is a government's obligation to disclose whether current year revenues were sufficient to pay for current year benefits or did current citizens defer payments to future taxpayers.

ENTITY:
Is the unit analysis a primary government (PG)?
Primary government meets ALL: separate elected governing body, legally separate, and fiscally independent of other SLGs. If a special unit is determined to be a PG then it prepares FS as if it was a primary…