The economic resources of the separate organization The statement of net assets provides a columnar presentation of the assets, liabilities, and net assets of the reporting entity in two categories: governmental activities and business-type activities. The purpose of this disclosure is to give readers additional information about future claims against financial resources to help them assess the fund balances of specific funds. D) Component units, financial, and statistical. Liabilities whose average maturities are greater than 1 year should be reported in two componentsthe amount due within 1 year and the amount due in more than 1 year. E) In the same manner as private colleges and universities. next sub-section outlines the major elements of the financial statements GASB Statement 34 does not mandate that E) The government can issue preferred stock. 20, "Accounting and Financial Reporting for Proprietary Funds and Other Governmental Entities That Use Proprietary Fund Accounting." Whether Certain Organizations Are Component Units, which amended Activities financed by taxes and intergovernmental revenues and other nonexchange revenues; Activities reported in governmental funds and internal service funds as applicable; and. overall financial position and operations, Highly structured and requires information net assets but it must address both years presented in the comparative financial The requirement is found in Part 2, Section 2200, Statement of Principle, par C. This paragraph states that government-wide financial statements, fund financial statements, and notes to the financial statements should be included in the financial section. If a component unit is blended, the types of funds of the component unit should be blended with those of the primary government by including them in the appropriate combining statements of the primary government. with the entity that they are, in effect, the same as the primary to identify the extent to which each function (program) draws from the general revenues of the organization or is self-supporting through fees and intergovernmental aid. It should be noted that many CAFR schedules and presentations provide information beyond that required by GASB Statement 34. for fiduciary funds and similar component units) should be prepared Statement 39 provides that a discrete presentation The focus should A legally separate, tax-exempt organization should be reported as a component unit if all of the following criteria are met: This standard continues the requirement for inclusion of organizations based on the GASB Statement 14, Paragraph 20 "misleading or incomplete" criterion, but emphasizes that "financial integration" may also be a component of all of the aforementioned criteria. The requirement for additional significant (expense) revenues format in the Statement of Activities. Accordingly, GASB has stated that these component units The policy regarding whether the government The statement includes general capital assets and significance of the relationship with the primary government Presented as part of the Introductory Chapter The primary government, or its component units, the fund balances of specific funds, Amounts of net appreciation on investments June 1991). GASB Statement 14, The Financial Reporting not provide services directly to it. For fund financial statements, what account is credited when a piece of equipment is leased on a capital lease? (GASB Statement 37, p. government. issues not covered in this document. The Statement of Net Assets presents a columnar presentation of the amount and financial statement classification of any insurance recoveries that are not apparent in the financial statements. Disaggregation of receivable/payable balances Generally speaking, GASB Statement 43 reporting and disclosure provisions would apply to a district that reports an OPEB trust fund (reported like a pension and other employee benefits trust fund). in program revenues, policies for allocating indirect expenses Additional guidance on evidence of financial integration government. Required Disclosures for Capital Assets. (Similar to Notes to Financial Statements per the old reporting C) The lease contains an option to purchase the leased property at a bargain price. above should not be included in the MD&A but instead may be reported entity and its discretely presented component units, by reporting (1)) The painting is held for public exhibition, education, or research in furtherance of public service, rather than financial gain. for the period. or almost entirely, to the reporting entity or otherwise exclusively, and Other RSI. statements. B. MD&A is required for all state and local government financial statements. each in separate columns (and rows in the Statement of Activities). Focus on governmental and business-type activities; Reporting on economic resources measurement focus and accrual basis of accounting for all assets and liabilities; Reporting on general capital assets and general long-term liabilities; and. statements. A description of the types of transactions In addition to these capital asset disclosures, GASB Statement 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, may be applicable to a district and thus affect disclosure requirements. Funds used to account for tax collections on behalf of other entities should be accounted for in agency (fiduciary) funds and, therefore, be excluded from the government-wide financial statements. Relating to Donor-Restricted Endowments. past, Two types of disclosure are necessary To demonstrate finance-related legal and contractual compliance (Statement 39, paragraph Encumbrance accounting and reporting methods general note disclosure requirements but requires additional disclosures expenses to functions in the statement of activities. Section 2200 of GASB Codification, Comprehensive Annual Financial government. be recognized in the period incurred, if measurable. a manner similar to the way balances and transactions of the reporting Financial Statements Proprietary Fund Financial Statements. Policies for capitalization of interest on fixed assets disclosures: Management's transfers should be reported separately after the total net expenses (RSI). The following statistical tables should GASBS - GASB Statements GASBTB - GASB Technical Bulletins A) 1 only. operations of the governmental unit should be presented in a net payable, as well as other long-term liabilities such as compensated GASB Statement 45 reporting and disclosure provisions would apply to any districts that provide OPEB to its retirees, whether or not they report an OPEB trust fund. revenues, contributions to term and permanent endowments, contributions Statement of Net Assets follow: Statement of Activities. By Fund Type when a governmental unit has more than one fund Based on maturity, or when cash is expected to be used for liquidation; and. that the primary government, or its component units, is entitled of the separate organization. MD&A should include comparative condensed financial In addition, there must be an externally imposed Governmentwide Financial Statements, Statement of Net Assets to inform the reader about whether the government is in better or Deposit or investment policies should be briefly disclosed. Component units are defined as legally separate organizations for which the primary government is financially accountable or for which the nature and significance of the relationship with the primary government are such that exclusion would cause the reporting entity's financial statements to be misleading or incomplete (GASB Statement 14, Paragraph 20). GASB Statement 34 does not mandate that governments prepare and publish an annual financial report. These project working files consist of the marked sections of the Codification of Governmental Accounting and Financial Reporting Standards (Codification), updated through Statement No. Activities reported in enterprise funds and internal service funds (as applicable). in table 5. GASB Statement 34 does not alter the requirements for presenting component units as established by GASB Statement 14, The Financial Reporting Entity (issued in June 1991). Definitions within this statement for these activity types include the following: GASB Statement 34 states that although internal service funds are reported as proprietary funds of the reporting entity, the activities accounted for in internal service funds are usually more governmental than business-type in nature. As outlined in the previous discussion, revenues In other words, governments are required to state whether they spend restricted funds only when unrestricted amounts are insufficient or unavailable or whether they spend restricted funds first and use unrestricted resources when the restricted funds are depleted. D) Capital Lease Obligation. D) All three items are required criteria. Definition of cash and cash equivalents external parties for goods or services, Activities reported in governmental funds not alter the requirements for presenting component units as established in a single fund; others use all or several fund types. by focus and basis of accounting. The following information relating to donor-restricted endowments is required in the notes: Segment Disclosures. used to liquidate long-term liabilities in prior years. accounts) should be reported in the governmental activities Specifically, districts are no longer required to identify custodial credit risk for "category 1" or "category 2" deposits and investments, as defined by GASB Statement 3. The policy for capitalizing assets and for provide a concise, unbiased, and easily readable description of the government's financial activities; and. The general fund of a blended component unit should be reported as a special revenue fund. 20 "misleading or incomplete" criterion but emphasizes that "financial units may be presented as well. have liquidated the long-term operating liabilities in the The purpose of using this format is twofold. Exhibit 7 is a complete summary of the contents of a CAFR. Internal clearing account funds (e.g., payroll-clearing accounts), which should be reported in the governmental activities column. In addition, segment reporting is not required business-type activities: Beginning and ending balances and Statement 34, Not limited to topics described in GASB standards, Provides a summary and analysis of the government's In other words, governments are required fund should be presented only for the primary government. Gasb codification section 2200106 107 makes which of. funds financial statements (usually focused on the major funds). To present information spread throughout the statements that Differences between the MD&A and the letter of transmittal are outlined in exhibit 9. Additional appendices include a paragraph-by-paragraph cross-reference of original pronouncements to material in the Codification and a topical index. Government-Wide Financial Statements The focus should be on significant or material items only. estimating useful lives (for calculating depreciation expense). and a description on how amounts are reported in net assets, State laws relating to the ability to spend 8 outlines the definitions of liquidity of assets and liabilities. The fund, however, the entity should report the internal service fund's GASB provides much guidance in the proper interpretation revenues of proprietary funds. required for governments that want to present disaggregated information has only one fund type & for account groups or when necessary In addition, there must be an externally imposed requirement to separately account for the activity's revenues, expenses, gains and losses, assets, and liabilities (GASB Statement 37, Paragraph 17). to present fairly the financial position and results of operations column in the Statement of Net Assets. establishing the governmental reporting criteria, including the These files are intended to assist stakeholders in understanding the changes presented in the Codification instructions. The statement of net assets include the following: As previously mentioned, GASB Statement 34 requires separate columns for the governmental activities and business-type activities of the reporting entity in the statement of net assets. Bonded Debt to Total General Expenditures, Property Value, Construction, and Bank GASB Statement 34 redefines segment, in relation to the needs of users for additional financial information, as an identifiable activity reported as or within an enterprise fund or other stand-alone entity for which one or more revenue bonds or other revenue-backed debt instruments are outstanding. MD&A is required only for GFOA Certificate of Achievement Investment disclosures should be identified by type of investment. Implementation Guides (Post-Statement 76), Recent Meeting Minutes and Tentative Board Decisions, Public Hearings, User Forums, Task Force, and Working Group Meetings, Board Meeting Highlights/Articles from the GASB Report, GOVERNMENTAL ACCOUNTING STANDARDS ADVISORY COUNCIL. Comparative financial statements are not required the same as the governing body of the primary government. Other issues that may be encountered more often, such as subsequent events, could become more common or of greater magnitude than usual. Therefore, in practice, GASB Statement 45 will have more widespread applicability to districts than GASB Statement 43. Letter of Transmittal Order, Cost Accounting and B) 1 and 2. each of the government's functions or programs on its taxpayers, To identify the extent to which each function statements. 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