Governmental Accounting Reporting

Fund F/S Government wide F/s

(Full Accural Method) Section - 1 Section - 2 Section - 3 Section - 4 Section - 5
MD&A Govt Wide F/S Funds F/s Notes to F/S RSI other than MD&A

Governmental Funds Proprietory Funds Fiduciary Funds 1 Statement of Net Position :- (Balance Sheet)
a Governmental Activities Government Funds Proprietory Funds Fiduciary Funds
General Fund (One) Internal Service Fund Pension Trust Fund Governmental Funds
Eg:- Property tax Eg:- Maintenance Dept, IT Dept +
`+ Not accounted in any other fund Invstement Trust Fund Internal Service Fund Statement of Net Position Balance Sheet Statement of Net Position Statement of Fiduciary Net Position
Enterprise Fund On belaf on other govt entities
Special Revenue Fund Cost recovered from Fees and Charges b Business Activities Statement of Activities Statement of Revenues, Statement of Revenues, Statement of Revenues,
Eg:- Toll tax, Motor Fuel tax Eg:- Hospitals, Airports etc Private Purpose Trust Fund Enterprise Fund Expenditure and changes Expenses and changes Expenses and changes
Eg:- Tax Refunds, Scholarships Component Unit in Fund Balance in Fund Net Position in Fiduciary Net Position
Capital Projects Fund c Donot Include Fiduciary Fund (Legally Separate Units)
Eg:- Costruction of Roads, Parks etc Custodial Fund Reconciliation to Govt-wide Statement of Cash Flow
As an Agnet - Taxes collected on
Debt Service Fund of other govt 2 Statement of Activities :- (Income Statement) Primary Govt is Close Financial
Eg:- Repayment of Bonds Debt a Expense by Function financially Accountable (OR) Relationship such that Major Funds (FYI) Bsics F/S = Section 2 + Section 3 + Section 4
b Revenue to the component exclusuion will cause
Permanent Fund c Special Items misleading info 1 10% Criteria
d Extraordinary items a) Individual govt funds are compared
e Transfers with the total of all govt funds
Modified Accurual Accounting f Changes in Net Position b) Enterprise fund with the total
(Current Financial Resource Approach) of all enterpriese fund
Accounting
Revenue - Measureable & Available
(Current + 60 days next year) ACCURAL MODIFIED ACCURAL
Effective & Efficient operations/Profits Budget Compliance Discreet Presentation Blended Presentation 2 5% Criteria
Expenditure :- Recognize all current Economic Resource approach Financial resource approach (Separate Column) (added to the govt activity a) Govt Funds are compared with total
year expenditures OR which is an Rev if Earned +realized/realizable Rev if measurable +available column or Busisness of all govt and enterprise fund
obligation from current resources Expense/ matching Expenditure/ recognize all spending activity column)
Capitalize Fixed Assets/ Long term debt Fixed assets= Expenditure; Debt+other fin. Sources Only those that passed the 10% test would be applicable for the 5% test. Those that failed the 10% test would not be tested for the 5% test,
B/S Presentation Net Position -Invested/restricted/unrestricted Fund Balance - Reserved ( nonspendable/Restricted/Committed/Assigned ) Two Conditions Only applies to Govt Funds and Enterprise Funds
(Fund Balance) - Unreserved (unassigned) 1 Does the CU provide services that are NOT primary to the government itself Internal Service Fund and Fidicuary
2 Does the CU have a seperately elected governing board Funds are not considered
Reserved Unreserved (getting budget approved is OK)
Non-Spendable - Inventory
Restricted - Externally Restricted Unassigned Note :- Even if the question gives one fulfilled condition, have to assume the
Committed - Internally Restricted other condition is met
Assigned - Intent to use

Blended presentation (not separately presented) is used when the component units are so intertwined with
the primary government that they are, in substance, same as the primary government.
Specifically, the unit is blended if
1 The governing body of the component unit is substantially the same as the primary government and (a) there
is financial benefit / burden relationship or (b) there is common management
2 The services provided are entirely or almost entirely to the primary government (OR) The component's debt
BAE Accounting will be repaid entirely or almost entirely by the primary government.

Budgetary Accounting Activity Accounting Encumbrance Accounting

(Create a Budget at the Beginning of the year) Flow of Current Resources and NOT profit or loss (Legal Commitment)
(Close the same Budget) Matching concept does not apply Open Purchase Order
(No Legal Commitment) (Obligation to spend)
Revenues
Estimated Revenue - Revenue expected to be Expenditures J/E :- {Budgeted - 1500/Vehicle | Actual - 1600/Vehicle}
available for spending Assets - Expenditure
Estimated other financing sources :- Debts - Collected from other financing sources 1 Place the order :- (2 Vehicles)
Expected from long term debt Encumbrance 3000
Appropriations :- Expected to incur in the CLOSE - Fund Balance (Unreserved R/E) Ⓑ To Budgeting Fund Balance - 3000
current period Reserved for Encumbrance
Estimated other financing uses - Expected
operating transfers 2 Receive the Supplies :- (1 Vehicle)
2a Cancel the Encumbrance & Record the actual invoice
*Balancing :- Budgeting Fund Balance - Unreserved Budgeting Fund Balance - 1500
Ⓑ Reserved for Encumbrance
J/E :- To Encumbrance 1500
Estimated Revenue 800
Estimated other financing source 300 2b Expenditure 1600
Budgeting Fund Balance - Unreserved (Defecit) xxx Ⓐ To Voucher Payable 1600
To Appropriations 700
To Estimated other financing uses 250 3 Payment to Vendors :-
To Budgeting Fund Balance - Unreserved (Surplus) 150 Plug Ⓐ Voucher Payable 1600
To Cash 1600
Year End (REVERSE)

4 Year-end Closing Entries :-

4a Budgeting Fund Balance - 1500
Ⓑ Reserved for Encumbrance
To Encumbrance 1500

4b Fund Balance - Unreserved 1500

Ⓑ =ⒶBudgetary
To Book
Fund Balance - Reserved 1500

Ⓐ = Activity Book

⮚ The sum of Expenditures and Open Encumbrance should not exceed the
appropriations, this is avoid exceeding budget

⮚ Fund available to use = Appropriations - Encumbrances -

Expenditure

⮚ Encumbrance Accounting applies to only General Fund, Special Revenue

Fund and Capital Project Fund

⮚ We can have O/S Encumbrance at the end of the year but not the Open
Encumbrance, 4b is the O/S Encumbrance

Activity Accounting

Revenues Expenditures
(Measurable and Available to Spend) Focus is on the outflow of the resource

Function or Program (Why?)

⮚ Purpose of the expenditure
Exchange Revenue Non-Exchange Revenue ⮚ Eg :- Public Safety, Healty & Welfare etc
(Cash for Goods/Service) ⮚ Programs - Education, Environment
Derived Tax Revenue
⮚ (Based on a Transcation) Organizational Units (Who?)
⮚ Eg :- Income tax, Sales Tax ⮚ Eg :- Police Dept + Fire Dept = Public Safety
⮚ Recognized on Receipt basis i.e., when received
Activities (Where?)
Imposed Non-Exchange Revenue ⮚ Eg :- Police training, Crime Control etc
⮚ Eg :- Property Tax, Fines & Penalties, Licesense and Permits
Time Requirement Apply (use or use may begin) ⮚ Recognized when billed (60 days crtieria apply) Object (What?)
⮚ Licesense and Permits are Recognized on Receipt basis i.e., when received ⮚ Based on Nature
⮚ Eg :- Salaries, Rent, Utilities etc
Government Mandated Non-Exchange Revenue
⮚ Eg :- Fed Grants Character (When?)
Eligibiltiy Requirement ⮚ Fiscal Period of expected benefits
Voluntary Non-Exchange Revenue ⮚ Past - Debt service
⮚ Eg :- Donation ⮚ Present - Current Expenditure
⮚ Based on a formula ⮚ Future - Capital Outlay

A. Required characteristics of Recipient

B. Reimbursment
C. Contigiencies

⮚ When Timing is met but eligibiltiy is not met, treat as Deferred Inflow/Outflow
⮚ When Eligibiltiy is met but Timing is not met, treat as Liability
⮚ Collected in advanve, treat as deferred Inflow
 CONTENTS
SECTIONS
Commercial Statement of Cash Flows
- Cash received from customers
- Cash paid to vendors (inventory and/or supplies)
- Cash paid to employees
- Cash interest and dividends received
- Cash interest paid
- Income taxes paid
Operating activities - Cash transactions relating to buying and selling of trading
(Relating to our securities that are classified as current assets
current assets, other - Cash received or paid relating to transactions such as
than cash/cash insurance proceeds and lawsuit settlements
equivalents, and our
current liabilities,
other than those that
bear interest)

- Cash received in relation to loans to others: principal

payments only
- Cash paid in relation to loans to others: when we give them
the loan
- Cash paid for PP&E/cash received from selling PP&E
- Cash paid for acquiring another entity under the acquisition
Investing activities method (shown net of cash acquired)
(Relating to our non-
current assets)

- Cash received from issuance of debt (bonds, notes, etc)

- Cash paid in relation to our debt: principal payments only
- Cash received from issuing stock (including reissuing
treasury stock)
- Cash dividends paid (not just declared)
- Cash paid to repurchase treasury stock

Financing activities
(Relating to OUR LT
and/or interest-
bearing debt and
OUR equity)
 - Purchase of fixed assets via issuance of stock
- Conversion of bonds to equity
- Acquisition of assets through a capital lease
Noncash disclosures - Nonmonetary exchanges
(when material)
CONTENTS
SECTIONS
Non-Profit Statement of Cash Flows
Generally the same items as the commercial SCF, as
well as:
- Cash contributions received that are without donor
restrictions
- Charitable cash disbursements paid
- Cash received from the sale of financial assets not
restricted for long-term purposes
- Cash activity associated with agency transactions

Note that proceeds from insurance settlements are only Operating activities
operating inflows if not specifically associated with
investing activities (i.e. LT assets)

Generally the same items as the commercial SCF, as

well as:
- Cash received from the sale of works of art
- Cash paid for the purchase of works of art
- Cash proceeds from the sale of assets that were
received in a prior period and whose sale proceeds
were (donor) restricted to investment in equipment
Investing activities

Generally the same items as the commercial SCF, as

well as:
- Cash contributions received that are (donor)
restricted to acquiring, constructing, or improving PP&E
and other LT assets
- Cash contributions received that are (donor)
restricted to establishing or increasing a donor- Capital & related financing activities
restricted endowment fund

Note that non-profits generally don't have stock and

thus don't pay dividends..
Also note that CFF may be segregated into "proceeds
from donor-restricted contributions for long-lived
assets" and "other financing activities"

Noncapital financing activities

- Contributed securities
- Construction in progress or other fixed asset
purchases included in A/P
- Contributions of beneficial interest (see F8-62 in
module 6 for a definition of beneficial interests)
- Noncash debt refinancing transactions
 CONTENTS
Government Statement of Cash Flows
2 notes on the SCF for governments:
- Cash received from sales of goods and services 1. Only the proprietary funds have them.
- Cash paid to suppliers and employees 2. The 2 financing sections are presented before the
- Cash received from interfund reimbursements investing section; I have them last here so they can be
and exchanges, including payments in lieu of taxes more easily compared to the FASB SCFs.
- Cash transactions not meeting the definition of
the other categories

Notes on methods:
1. For commercial SCFs, either the indirect or direct
method may be used. If the direct method is used,
the entity must also reconcile the cash flows from
operations to net income.
2. For non-profit SCFs, either the indirect or direct
method may be used. If the direct method is used,
the entity is not required to reconcile the cash flows
from operations to net income.
3. For government SCFs, the direct method must be
used. The government must also reconcile cash flows
from operations to operating income.
- Cash received in relation to loans to others:
principal payments AND interest income
- Cash paid in relation to loans to others: when we
give them the loan Final note: IFRS allows more flexibility in classifying
- Cash inflows and outflows associated with equity cash flows related to interest, dividends, and income
transactions taxes:
1. Interest and dividends received - both in CFO
under US GAAP - can be in either CFO or CFI.
2. Interest paid - CFO for GAAP - can be either CFO
or CFF.
3. Dividends paid - CFF for GAAP - can be either CFO
or CFF.
4. Taxes paid - CFO for GAAP - are generally still CFO
for IFRS, but portion specifically identified with
- Cash received from issuing debt associated with investing and financing activities can be CFI or CFF.
capital assets
- Cash paid related to debt associated with capital
assets: principal payments AND interest expense
- Cash received from capital grants
- Cash received from contributions associated
with capital assets
- Cash activity related to special assessments
associated with capital assets

- Cash received from issuing debt for noncapital

purposes
- Cash paid related to debt for noncapital
purposes: principal payments AND interest
expense
- Cash received from noncapital grants and
subsidies
- Cash received from property taxes not restricted
for capital use
- Operating transfers
The textbook does not mention any noncash
disclosures for a government's statement(s) of
cash flows.
nts:
ve them.
resented before the
here so they can be
B SCFs.

he indirect or direct
t method is used,
cash flows from

e indirect or direct
t method is used,
ncile the cash flows

ect method must be

reconcile cash flows
ome.

ility in classifying
dends, and income

d - both in CFO
CFO or CFI.
can be either CFO

- can be either CFO

e generally still CFO

entified with
an be CFI or CFF.
Government Fund F/s
 Government w

vernment Fund F/s

Fiduciary Fund F/s
Budgetary Comparasion Schedule
Government wide FS (Total 2)

FUND F/S (Total 8)

Proprietary F/S
Comparasion Schedule
)
Proprietary F/S
Component Unit F/s
 1 For Revenue Recognition under modified accural, if a receivable is recorded in a year and the question is silent
within the 60 days of the next year and have to recognize the revenue

2 Depn Expense is not recorded under Govt Funds due to modified accural accounting where fixed assets is not c

3 Present obligations to sacrifice resources that the government has little or no discretion to avoid are called liab
“Asset”, as described by GASB conceptual framework, are the resources with present service capacity that gove

4 Under modified accrual accounting -

Expenditure - Payment to other funds
Other financing uses - Transfer to other funds
If any fund is transferring or contributing any amount without any goods/service in exchange, it is called transfe

5 A service concession arrangement is an arrangement whereby a government or other public sector body contra
grantor's infrastructure assets such as roads, bridges, tunnels, airports, energy distribution networks, prisons o
deferred inflow for the govt and is recognized as a liability.

6 A
Grants and donations accepted by an University to finance research or teaching
1
projects.
2 Municipal convention hall construction fund.
3 Deferred compensation plan fund.
4 Investment pool held by State on behalf its County.
5 Lotteries fund.
6 Central garages and motor pools fund.
7 General long-term bond redemption fund.
8 State grant for new bridge fund.

Statement of Cash Flows

A B
1 Particulars
2 Cash paid to employees
3 Cash paid to suppliers
4 Cash paid in lieu of taxes (not based on services provided)
5 Cash received from operating grants
6 Cash received from sales to public
7 Cash received from sales to other department

8 Cash received from sale of unrestricted investments to finance upcoming equipment

purchases
9 Cash received from capital grants
10 Cash paid for equipment
11 Cash received from sale of equipment (gain of $10,000)
12 Cash received from short term borrowing for working capital
13 Purchase of investments from cash restricted for retirement of capital bonds

14 Cash paid in discretionary transfer to General Fund to finance general capital asset purchases
15 Cash paid for interest on bonds issued to finance plant expansion
16 Capital assets donated by developers
17 Cash received from sale of bonds to construct new plant
18 Interest received on unrestricted investments

19 Interest received on investments restricted for capital assets purchases (The interest is
restricted)
20 Unrestricted cash, beginning of the year
21 Restricted cash, beginning of the year
d in a year and the question is silent about the collection, then we have to fairly assume that the collection has been received

ccounting where fixed assets is not capitalized

no discretion to avoid are called liabilities. Liabilities means an amount to be paid from current financial resources.
th present service capacity that government presently controls.

ervice in exchange, it is called transfer.

nt or other public sector body contracts with a private operator to develop (or upgrade), operate and maintain the
rgy distribution networks, prisons or hospitals. In that case the private sector gives a fees to the govt which is a

B
Special revenue fund
Capital projects fund
Pension trust fund
Investment trust fund
Enterprise fund
Internal service fund Central garages and motor pools fund is for garage services and motor services provided by this fund t
Debt service fund
Capital projects fund

C
Amount ($) Classification
800,000 Cash flow from operating activities.
1,000,000 Cash flow from operating activities.
75,000 Cash flow from noncapital financing activities
1,500,000 Cash flows from noncapital financing activities.
4,000,000 Cash flow from operating activities.
700,000 Cash flow from operating activities.

100,000 Cash flow from investing activities.

10,000,000 Cash flows from capital and related financing activities.

2,000,000 Cash flows from capital and related financing activities.
80,000 Cash flows from capital and related financing activities.
35,000 Cash flows from noncapital financing activities.
120,000 Cash flow from investing activities.

95,000 Cash flows from noncapital financing activities.

 500,000 Cash flows from capital and related financing activities.
7,000,000 Significant non cash financing and investing activities.
20,000,000 Cash flows from capital and related financing activities.
50,000 Cash flow from investing activities.

83,000 Cash flow from investing activities.

4,300,000 Others.
2,500,000 Others.
has been received

services provided by this fund to other government entities.