FAR-F10-M5-Notes and Supplementary Information Flashcards
What is the main segment of the notes to government financial statements?
The main segment is the summary of significant accounting policies, which would include a government’s policies for thing like capital assets, pension plans, debt service schedule, long term liabilities and major projects etc.
What is the general format of government reporting?
Management Discussion and Analysis (before the financial statements)
Basic Financial Statements include
Government Wide Financial statements
Government fund financial statements
Notes to the financial statements
Required Supplementary Information
Other Supplementary Information
Is the following statement true or false? The MDA is part of required supplementary information and is meant to introduce the basic financial statements and provide an analytical overview of the government’s financial activities. The MDA may include objective analysis of current conditions, comparison of prior and current year activities and significant results reported in fund financial statements. Reconciliation of the fund financial statement is included as part of the basic financial statements, not required supplementary information.
TRUE. The MDA is part of required supplementary information and is meant to introduce the basic financial statements and provide an analytical overview of the government’s financial activities. The MDA may include objective analysis of current conditions, comparison of prior and current year activities and significant results reported in fund financial statements. The identity of the primary government and discrete component units, a description of the effect of the economy on the F/S, and all major initiatives should be included.
Reconciliation of the fund financial statement is included as part of the basic financial statements, not required supplementary information.
Is the MDA required to present an analysis of significant variations between the original budget and the final budget?
No, the MDA is NOT required to present an analysis of significant variations between the original budget and final budget. This is included in budgetary comparison schedule as part of notes to the financial statements, however it is optional.
Are the notes to the financial statements required to present a description of the significant assumptions and implications of use of the modified approach for accounting for infrastructure?
Yes, the notes to the financial statements are required to present a description of the significant assumptions and implications of use of the modified approach for accounting for infrastructure.
Can required supplementary information be reported before the MDA or after the MDA or both?
Yes, the required supplementary information is reported before the MDA or after to the basic financial statements. The notes to the financial statements are integral to the financial statements and include important disclosures about the basic financial statements, not the required supplementary information.
In accordance with Required Supplementary Information, is budgetary comparison schedules required to be prepared for the general fund and for each major special revenue fund?
Yes, budgetary comparison schedules must be prepared for the general fund and for each major special revenue fund that has a legally adopted annual budget and may be presented as either required supplementary information or in the basic financial statements
What must be shown in the budgetary comparison schedule?
The budgetary comparison schedules MUST show the ORIGINAL BUDGET, THE FINAL AMENDED BUDGET AND ACTUAL AMOUNTS.
In relation to the budgetary comparison schedule, is the computation of variances between budget and actual, optional or required?
Computation of variances between budget and actual is optional.
In relation to the budgetary comparison schedule, is the computation of differences between the original and final amended budget, optional or required?
The computation of differences between the original and final amended budget is optional.
Is the following true or false? Budgetary comparison may use either GAAP or budgetary formats, or basis of accounting, but must include a reconciliation to GAAP.
TRUE. Budgetary comparison may use either GAAP or budgetary formats, or basis of accounting, but must include a reconciliation to GAAP.
On what accounting basis does GASB recommend that governmental fund budgets be prepared?
The basis for preparing the budget should be the same as the funds basis of accounting. Therefore for governmental funds, they would use the modified accrual basis of accounting.
What pension information is required to be presented?
Required supplementary information should be presented for each of the 10 most recent fiscal years
1. sources of changes in net pension liability
2.information about the components of the net pension liability and related ratios
3. significant methods and assumptions used to calculate the actuarially determined contributions.
4. annual weighted rate of return on pension plan investments for each of the 10 years presented.
Are combining statements for non major funds required or optional supplementary information?
Combining statements for non major funds are optional supplementary information.
