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Governmental Accounting Standards Board (GASB)

has the authority to establish standards of financial reporting for all units of state and local governments, was created in 1984.


GASB Stament No. 55 - Establish hierarchy of sources

1. Officially established accounting principles -GASB Statements and Interpretaions.
2. GASB Technical Bulletins and AICPA Industry Audit and Accounting Guides and Statement of Position cleared by GASB
3. AICPA Practice Bulletins cleared by the GASB and consensus positions of groups of accountants organized by the GASB.
4. Implementation guides published by the GASB staff and practices that are widely recognized and prevelant.


Governmental accounting concepts

similar to FASB Concepts Statements - they set forth fundamentals on which governmental accounting and reporting standards will be based.
The rules on how the board writes their GAAP


GASB Concepts Statement No. 1 -Objectives of Financial Reporting

Establishes the objectives of general purpose external financial reporting by state and local gov entities and applies to both Gov-type and business type activities


GASB Concepts Statement No. 1 - three primary users of the external state and local gov Financial reports

1. Citinzenry
2. Legislative and oversight bodies
3. Investors and creditors
Gov financial reports are primarily used to compare actual financial results with budgets, to assess financial condition and results of operations, determining compliance with finance-related laws and regulation, and in evaluating effectiveness and efficiency.


6 GASB Qualitative characteristics

1. Understandability: the information can be intrepreted by the user.
2. Reliability: the info is reasonably free from error or bias.
3. Relevance: the info has the capacity to make a difference in a decision by a user
4. Timeliness: the info is avail before it loses its capacity to affect the decision.
5. Consistency: the info is consistently presented over time.
6. Comparability: users can identify similarities and differences between two entities.


GASB Concepts Statments No. 2 - Service Efforts and Accomplishments Reporting (SEA Reporting)

Objective: to provide more complete info about a government entity's performance than can be provided by traditional F/S and schedules.
-necessary for assessing accountability and making informed decisions.


GASB Concepts Statement No. 3 - Communication Methods in General-Purpose External Financial Reports

selecting communication methods to present items of information within general-purpose external reports that contain F/S
alternative methods:
Recognition in the Basic F/S (audited)
Disclosures in notes to the basic F/S
required supplementary information (only reviewed not audited)


GASB Concepts Statement No. 4 - Assets
(statement of financial position)

Statement of Financial Position
Assets- resources with present service capacity that gov presently controls


GASB Concepts Statement No. 4 - Liabilities (statement of financial position)

Liabilities - present obligations to sacrifice resources that the gov has little or no discretion to avoid.


GASB Concepts Statement No. 4 - Deferred outflow of resources. (statement of financial position)

Deferred outflow of resouces - consuption of net assets by the gov that is applicable to a future reporting period. Cr. Balance


GASB Concepts Statement No. 4 - Deferred inflow of resources (statement of financial position)

statment of financial position
an acquisition of of net assets by the gov that is applicable to a future reporting period. Cr. Balance (like deferred rev)


GASB Concepts Statement No. 4 - Net position

the residual of all other elements presented in a statement of financial position.


GASB Concepts Statement No. 4 - Outflow of resources (Resource flow statements)

a consumption of net assets by the gov that is applicable to the reporting period. Dr. Balance


GASB Concepts Statement No. 4 - Inflow of resources (Resource flow statement)

an acquisition of net assets by the gov that is applicable to the reporting period. Cr. Balance.


Fundamental Reporting Model

Minimum requirements - general purpose
1. Management's discussion and Analysis (MD&A)
2. Gov-wide financial statements (use the accrual basis of accounting)
-statement of net assets
-statement of activities
3. Fund Financial Statements
-government funds (modified accrual basis)
- B/S
- Statement of rev expenditures and changes in fund balances.
Prroprietary Funds- (accrual basis)
-statement of net assets
-Statement or rev expenses, and changes in fund net assets
-Statement of cash flow
(both the Gov funds and the Propietary funds get rolled up to the gov-wide F/S
Fiduciary funds- (accrual basis)
-Statement of fiduciary net assets
-Statement of changes in fiduciary net assets. (fiduciary funds are excluded from the gov-wide F/S
4. Notes to the Financial Statements
5. Other Required Supplemental Information (other than MD&A)


Comprehensive Annual Financial Report (CAFR)

Three major sections are included:
1. Introductory section (unaudited) letter of transmittal, organization chart, and list of principal officials.
2. Financial Section - including an auditor's report, the required info, and other supp infor
3. Statistical section- number such as net assets by component, changes in net assets, debt capacity, demographic and economic statistics.


Primary Government

either 1) a state government 2) a general-purpose local government 3) a special-purpose local gov that has a seperately elected governing body, is legally seperate and is fiscally independent of other state or local govs.


Component unit

A legally seperate organization for which the elected officials of a primary government are financially accountable. (primary gov will pay off all of the component units debts)


Modified approach for recording eligible infrastructure assets

infrastructure assets are not required to be depreciated if these two are met:
1. gov manages the eligible infrastructure assets using an asset management system
2. the gov documents that the eligible infrastructure assets are being preserved approximately at (or above) a condition level established and dislcosed by the gov.


Fund as defined by GASB

A fiscal and accounting entity with a self-balancing set of acocunts recording cash and other financial resources, together with all related liabilities and residual equities and balances, and changes therin, which are seggregated for the purposes of carrying on specific activities or attaining certain objectives in accordance with special regulations, restrictions, or limitaitons.


Fund Financial Statements - Governmental Funds

Modified Accrual basis
1 General
2 Special revenue
3 Debt service
4 Capital projects
5 Permanent


Fund Financial Statements - Proprietary Funds

Accrual basis of accounting
6. Internal service
7 Enterprise


Fund Financial Statements - Fiduciary funds

Accrual basis of accounting.
8 Agency
9 Pension and other employee benefit trust funds
10 Investment trust funds
11 Private-purpose trust funds


GASB Statement 54 - Five fund balance classifications