SU 6: Capital Project funds Flashcards
primary purpose
to insure / demonstate that expenditures are legally/ contractually compliant with enacted legislation
Requirement for capital project fund use
use to track resources legally restricted, committed or assigned to obtain capital assets
but the capital asset itself does not appear in the capital projects fund
Types of capital projects fund
General (public benefit)
Special assessment (particular benefit)
phases of capital asset acquisition/ construction
1) pre-construction/ authorization
2) construction
3) debt servicing
Financing types
1) tax supported debt (general obligation bonds or special taxes restricted to debt payment)
2) grants
3) other forms (special assessments)
Different in phases of capital projects financed by special assessment
Only 2 phases. Financing and construction become all one phase. less oversight than other funding methods
General fund journal entry to transfer cash to establish CPF
Dr Other financing uses - CPF
Cr cash
(JE for CPF will be Other financing sources)
Can cost of capital assets be accounted for in general fund
Yes, or special revenue fund, but only if they’re a small amount
Capital assets financed by proprietary funds or trust funds
No CPF
Interim financing for CPF
often necessary until external revenue comes in
borrowing from general fund
DR Cash
Cr Due to general fund, short term liability
Why is a bond discount debited to other financing source
because it is a reduction in the amount that will be collected from the sale of the bond
Bond discount procedure
discount shortfall funded by a trasfer from the general fund, funding sources must be at face value
no amortizing in fund accounting
Bond premium procedure
generally deposited into debt service fund
DR Other financing use - nonreciprocal transfer of bond premium to DSF
CR cash or ST payable)
where do increases or decreases in FMV get recognized in the financial statements
directly in investment revenue
Investment of revenue
DR Marketable securities
CR Cash
(only short term showing. long term goes on schedule of long-term asses)
no government wide adjustment
