Government - Fund FS

Question 1

How many fund financial statements are reported?

Answer 1

As many as the number of major funds (unlimited)

Major funds are reported in separate columns. Minor funds are combined.

Question 2

What constitutes a major fund that should be reported separately?

Answer 2

The funds is at lease 10% of total CATEGORY assets, liabilities, revenues, or expenditures for the govt or enterprise category.

The fund is at least 5% of the total ENTITY (govt/enterprise) assets, liabilities, revenues or expenditures.

Any other fund that govt officials believe is particularly important to FS users

Question 3

Governmental funds - FS layout

Answer 3

modified accrual accounting

Balance Sheet
+ current assets
- current liabilities
= fund balance

Stmt of Revenues, Expenditures, & Change in Fund Balance
  \+ revenues
  - expenditures
  \+ other financing sources
  - other financing uses
  = changes in fund balance

Question 4

Reconciliation of govt fund balances (modified accrual accting) to net position of governmental activities (govt-wide FS accrual accting)

Answer 4

modified accrual basis fund balance
add back: expensed LT assets
add back: internal service fund balances
add back: LT liabilities (negative adj b/c liab)
= accrual basis govt activity balance

govt fund balance
\+ LT assets
\+ internal service fund balances
\+ LT liabilities
= net position of govt entities

Question 5

Reconciliation of net change in govt fund (modified accrual) to net change in position govt activity FS (accrual) - ERIE CO example

Answer 5

net change in fund balance

+ capital assets
+ capital assets contributed to govt
- capital assets contributed BY govt

+ revenues in activity stmt that do not provide current financial resources so are not in the fund revenues

• expenses in activity stmt that do not use current financial resources so are not in the fund expenses (accrued int payable, accrued leave, amortization, pension exp, etc)

+ principal payments on LT debt (expensed on fund stmt), report as reduction in principal on accrued stmts

• loan proceeds reported as other financing rev in fund stmts, report as LT debt on accrued stmts

+ internal service fund net revenue (expense)

= change in net position - govt activities

Question 6

Reconciliation of net change in govt fund (modified accrual) to net change in position govt activity FS (accrual)

Answer 6

report revenues on accrual basis
report depreciation expense
add back capital outlays
report principal debt payments as reduction of liabilities
report other expenses on accrual basis
add the net revenue (expense) of internal service funds

Question 7

Proprietary funds - FS layout

Answer 7

Statement of net position:
+ assets
- liabilities
= net position

Statement of rev, expenditure, & change in fund net position:
\+ operating revenues
- operating expenses
\+ non-operating revenues
- non-operating expenses
= change in net position

Statement of cash flows (direct):
operating
investing
non-capital financing
capital and related financing
= CF for the period

Question 8

Fiduciary funds - FS layout

Answer 8

Statement of fiduciary net position:
+ assets
- liabilities
= fiduciary net position

Statement of change in fiduciary net position:
+ additions
- deductions
= changes in fiduciary net position

Question 9

Component unit - FS layout

Answer 9

Statement of net position:
+ assets
- liabilities
= net position

Statement of change in net position:
\+ operating revenues
- operating expense
\+ non-operating revenues
- non-operating expense
= changes in net position

Question 10

Notes to govt wide FS

Answer 10

1) description of govt-wide FS, noting the exclusion of fiduciary funds
2) measurement focus and basis of accounting used in FS
3) policy for eliminating internal activity in the stmt of activities
4) policy for capitalizing assets and estimating the useful lives of the assets
5) if modified approach to infrastructure accounting is used, then describe that approach
6) govt’s policy for defining operating and non-operating revenues of proprietary funds
7) govt’s policy regarding whether to first apply restricted or unrestricted resources when an expense is incurred for purposes where both restricted/unrestricted net assets are available

Question 11

Required supplementary information (RSI) other than MD&A

Answer 11

Three sections

Budgetary information
- original budget, final budget, actual budget, variance (may be presented as a separate statement in the FS)

Infrastructure information

• basis for condition of measurement
• condition level at which the govt intends to preserve eligible infrastructure (if using modified approach)
• factors that significantly affect trends in the info reported

Pension information

• present for each of the 10 most recent fiscal years
  
  • sources of changes in the net pension liability
  • information about the components of the net pension liability and related ratios