Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 13 Governmental Entities: Special Funds and Government-wide.

Slides:

Advertisements

Similar presentations

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 18 Governmental Entities: Special Funds and Government-wide.

Advertisements

Chapter 2 Principles of Accounting and Financial Reporting for State and Local Governments McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies,

Chapter Seventeen Accounting for State and Local Governments (Part II) Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or.

© The McGraw-Hill Companies, Inc., 2004 Slide 11-1 McGraw-Hill/Irwin Chapter Eleven Accounting for State and Local Governments (Part 1)

Chapter 8 Accounting for General Long-Term Liabilities.

Chapter Sixteen Accounting for State and Local Governments (Part I) Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution.

Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Slide 3-1 Balance Sheet and Statement of Cash Flows Chapter.

Fund Accounting -- Government Entities Hartwell C. Herring III University of Tennessee.

Advanced Accounting, Fourth Edition

Chapter 1: Introduction to

McGraw-Hill/Irwin©2007, The McGraw-Hill Companies, All Rights Reserved Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter.

McGraw-Hill/Irwin©2007, The McGraw-Hill Companies, All Rights Reserved Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter.

© The McGraw-Hill Companies, Inc., 2001 Slide 16-1 Irwin/McGraw-Hill 16 C H A P T E R Accounting for State and Local Governments (Part One)

2 Chapter Fund Accounting.

McGraw-Hill/Irwin Governmental Entities: Introduction and General Fund Accounting 17 Copyright © 2009 The McGraw-Hill Companies, Inc. All rights reserved.

Advanced Accounting by Debra Jeter and Paul Chaney Chapter 19: Introduction to Accounting for State and Local Governmental Units Slides Authored.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 5 Accounting for Other Government Fund Types Capital Projects, Debt.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 8 Government-Wide Statements, Capital Assets, Long-Term Debt McGraw-Hill/Irwin.

GASB Statement No. 34 Cliff Notes Laurie L. Piccirillo, Business Manager Brockway Area School District Dr. David M. Piper, Assistant to Superintendent.

Presented by: Professor N Amy Santos, State College of Florida GOVERNMENTAL ACCOUNTING.

ACCT Accounting 4070 Chapter 2. ACCT Types of Gov’t Activities Governmental Business-type Fiduciary.

©2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn Accounting for State and Local Governmental Units.

© Pearson Education, Inc. publishing as Prentice Hall20-1 Chapter 20: Accounting for State and Local Governmental Units – Proprietary and Fiduciary Funds.

©The McGraw-Hill Companies, Inc. 2006McGraw-Hill/Irwin Chapter 18 Governmental Entities: Other Governmental Funds and Account Group.

Accounting for State & Local Governments, I

Other Governmental Funds  Capital Projects Accounts for flow of funds for general government capital asset acquisition Accounts for flow of funds for.

Govt. Reporting - 1 GOVERNMENTAL REPORTING City Council Budgetary Hearing.

Chapter 19 Governmental Entities: Proprietary Funds, Fiduciary Funds,& Comprehensive Annual Financial Report.

McGraw-Hill/Irwin©2007, The McGraw-Hill Companies, All Rights Reserved Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter.

The What and Why of Fund Accounting May 15, 2014 GFOAz 1.

McGraw-Hill© 2007 The McGraw-Hill Companies, Inc. All rights reserved. Principles of Accounting and Financial Reporting for State and Local Governments.

Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 18 Governmental Entities: Special Funds and Government-wide.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 6 Proprietary Funds McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill.

Chapter 6 Proprietary Funds -- Internal Service and Enterprise

Essentials of Accounting for Governmental and Not-for- Profit Organizations Chapter 1: Introduction to GNP Organizations.

© The McGraw-Hill Companies, Inc., 2004 Slide 17-1 McGraw-Hill/Irwin Chapter Seventeen Accounting for State and Local Governments (Part 2)

©The McGraw-Hill Companies, Inc. 2006McGraw-Hill/Irwin Chapter 17 Governmental Entities: General Fund.

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 12 Governmental Entities: Introduction and General Fund.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 8: Government-Wide Financial Statements; Fixed Assets and Long-term.

Chapter 9 Objectives: Learn why governments engage in business activities Learn about proprietary funds Learn about the unique accounting issues of enterprise.

©2003 Prentice Hall Business Publishing, Advanced Accounting 8/e, Beams/Anthony/Clement/Lowensohn An Introduction to Accounting for State and Local.

Chapter 10 Objectives: Learn about permanent funds Learn about fiduciary funds Learn how gains and losses are treated How trusts guard against inflation.

Slide CHAPTER 29 GOVERNMENTAL ACCOUNTING: THE SPECIAL-PURPOSE FUNDS AND SPECIAL GENERAL LEDGER.

TYPES OF FUND. REPORTING UNIT Each Governmental organization is described as Reporting Unit, and; prepares financial statements used by citizens, creditors,

Understand and explain the financial reporting of proprietary funds.

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 13 Governmental Entities: Special Funds and Government-wide.

Chapter Seventeen Accounting for State and Local Governments, Part II McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights.

Basic Financial Statements: Overview. Principle 1: Accounting & Reporting Capabilities  Present fairly and with full disclosure funds and activities.

McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 18 Governmental Entities: Special Funds and Government-wide.

© Prentice Hall Publishing – Governmental and NonProfit Accounting 7e 1-1 Freeman / Shoulders9 - 1 CHAPTER 9 GENERAL CAPITAL ASSETS; LONG-TERM LIABILITIES;

11-1 Chapter Eleven Accounting for State and Local Governments, Part I McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights.

Chapter Twelve Accounting for State and Local Governments, Part II McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin© 2008 The McGraw-Hill Companies, Inc. All rights reserved. 18 Governmental Entities: Special Funds and Government-wide Financial Statements.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 4 Accounting for the General and Special Revenue Funds Copyright © 2015.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 8 Government-Wide Financial Statements; Capital Assets and Long-term.

FISCHER | TAYLOR | CHENG Governmental Accounting: Other Governmental Funds, Proprietary Funds, and Fiduciary Funds.

Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 7 Fiduciary Funds Copyright © 2015 McGraw-Hill Education. All rights.

6-1 Accounting for Governmental & Nonprofit Entities JACQUELINE L. RECK SUZANNE L. LOWENSOHN 17/e Copyright © 2016 McGraw-Hill Education. All rights reserved.

Accounting for State and Local Governments, Part I

Accounting for State and Local Governments (Part 2)

Chapter 18 Governmental Entities: Special Funds and Government-wide Financial Statements Note: We provide a summary of the slides and suggestions on how.

Chapter 9 Financial Statements.

Government and Non-Profit Accounting

Accounting for Governmental & Nonprofit Entities

Accounting for State and Local Governments (Part 1)

Beams, Advanced Accounting 10e, Ch. 20

A Walkthrough of Government Financial Statements

A Presentation to: Wisconsin Government Finance Officers Association

Presentation transcript:

Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 13 Governmental Entities: Special Funds and Government-wide Financial Statements

13-2 Learning Objective 1 Understand and explain the differences in financial reporting requirements of the different fund types.

13-3 Big Picture  A government should establish those funds required by law and the specific operating and management needs of the government entity.  Figure 18-2 summarizes the different types of funds.

13-4 Overview of Accounting and Financial Reporting for Governments

13-5 The Governmental Funds: General Fund (#1 of 5)  General rule: All activities should be accounted for in the general fund unless specifically required by law or The nature of the activities is proprietary or fiduciary.  We discussed the general fund in chapter 12.

13-6 The Governmental Funds: Special Revenue Funds (#2 of 5)  Purpose: To account for the proceeds of specific revenue sources that are legally restricted to expenditure for specific purposes. With the exception of inflows for Capital projects and Expendable trusts. Includes resources and expenditures for operations, such as public libraries, when a separate tax is levied for their support.  Inflows: Usually from specific taxes or nontax sources not directly related to services provided.  A General Fund “clone”—identical accounting. Thus, we don’t discuss them in detail here.

13-7 Governmental Funds Worksheets  Each of the five governmental funds will report two fund-based financial statements: The Balance Sheet The Statement of Revenues, Expenditures, and Changes in Fund Balance

13-8 Worksheet for the Balance Sheet for the Governmental Funds

13-9 Worksheet for the Statement of Revenues, Expenditures, and Changes in Fund Balances for the Governmental Funds

13-10 Practice Quiz Question #1 Which of the following statements is true about fund accounting? a.An enterprise fund is an example of fiduciary fund. b.Most transactions of a state or municipal government are accounted for in the general fund. c.A capital projects fund is an example of proprietary fund. d.Most transactions of a state or municipal government are accounted for in the internal service fund. Which of the following statements is true about fund accounting? a.An enterprise fund is an example of fiduciary fund. b.Most transactions of a state or municipal government are accounted for in the general fund. c.A capital projects fund is an example of proprietary fund. d.Most transactions of a state or municipal government are accounted for in the internal service fund.

13-11 Practice Quiz Question #1 Which of the following statements is true about fund accounting? a.An enterprise fund is an example of fiduciary fund. b.Most transactions of a state or municipal government are accounted for in the general fund. c.A capital projects fund is an example of proprietary fund. d.Most transactions of a state or municipal government are accounted for in the internal service fund. Which of the following statements is true about fund accounting? a.An enterprise fund is an example of fiduciary fund. b.Most transactions of a state or municipal government are accounted for in the general fund. c.A capital projects fund is an example of proprietary fund. d.Most transactions of a state or municipal government are accounted for in the internal service fund.

13-12 Learning Objective 2 Make calculations and record journal entries for capital projects funds.

13-13 The Governmental Funds: Capital Projects Funds (#3 of 5)  Purpose: To account for financial resources used for the acquisition or construction of major capital facilities Except for those financed by: Proprietary Funds and Trust Funds

13-14 The Governmental Funds: Capital Projects Funds (#3 of 5)  A temporary fund related to the acquisition or construction of a specific capital project.  At the completion of the project: The fund is closed and The project ’s cost is recorded as a capital asset in the GCA-GLTL general ledger. Outflows: Costs incurred during construction are charged to expenditures. Inflows: Bond sales and transfers from the General Fund.

13-15 GCA-GLTL General Ledger GCA = General Capital Assets GLTL = General Long Term Liabilities GCA-GLTL General Ledger  Since governmental funds only report current resources and obligations, the long- term assets and liabilities are recorded in another location..

13-16 The Governmental Funds: Capital Projects Funds (#3 of 5)  Things to remember: Fixed assets or depreciation are not recorded in capital projects funds Long-term debt is not recorded in capital projects funds Capital projects funds typically do not have operating budgets A capital budget is prepared as a basis for selling bonds to finance a project, and the capital budget is the control mechanism for the length of the project The capital budget for the project may, or may not, be formally recorded in the accounts The fund records capital outlays as expenditures

13-17 Practice Quiz Question #2 Which of the following statements is true about capital projects funds? a.Capital projects funds record depreciation. b.Capital projects funds are permanent because long-term assets remain in the fund until disposal. c.Capital projects funds are required by law to have operating budgets. d.When a capital project is completed, the fund is closed and the asset is tranferred to the GCA-GLTL general ledger. Which of the following statements is true about capital projects funds? a.Capital projects funds record depreciation. b.Capital projects funds are permanent because long-term assets remain in the fund until disposal. c.Capital projects funds are required by law to have operating budgets. d.When a capital project is completed, the fund is closed and the asset is tranferred to the GCA-GLTL general ledger.

13-18 Practice Quiz Question #2 Which of the following statements is true about capital projects funds? a.Capital projects funds record depreciation. b.Capital projects funds are permanent because long-term assets remain in the fund until disposal. c.Capital projects funds are required by law to have operating budgets. d.When a capital project is completed, the fund is closed and the asset is tranferred to the GCA-GLTL general ledger. Which of the following statements is true about capital projects funds? a.Capital projects funds record depreciation. b.Capital projects funds are permanent because long-term assets remain in the fund until disposal. c.Capital projects funds are required by law to have operating budgets. d.When a capital project is completed, the fund is closed and the asset is tranferred to the GCA-GLTL general ledger.

13-19 Learning Objective 3 Make calculations and record journal entries for debt service funds.

13-20 The Governmental Funds: Debt Service Funds (#4 of 5)  Purpose: To account for the servicing of debt initially recorded as a liability in the GCA-GLTL general ledger.  “Servicing of Debt” is the payment of (1) interest and (2) debt principal at maturity.  The accounting is the same as for the general fund.  Unusual Features: Interest is not accrued until the due date. Principal payments are not recorded as liabilities until the due date.

13-21 Debt Service Funds  Examples of general long-term debt obligations: Serial bonds Term bonds Special assessment bonds Notes and warrants Capital leases

13-22 Special Assessments  Special Assessments are Assessments made against taxpayers (citizens or businesses) that directly benefit from improvements. Examples: sidewalks, street lighting, gutters  Special Assessment Bonds are usually issued to initially pay for the improvements. Over time, the special assessments levied against taxpayers are used to pay off the bonds. All construction activity takes place in a Capital Projects Fund.

13-23  Purpose of GCA-GLTL General Ledger: Accounts for capital assets (at historical cost) and Long-term debt not accounted for in Enterprise Funds, Internal Service Funds, or Trust Funds.  The GCA-GLTL General Ledger is not a fund It has no cash for paying liabilities.  It is a self-balancing set of accounts. The GCA-GLTL General Ledger

13-24 General Capital Assets  Categories of Assets Land Buildings Improvements other than buildings Equipment Construction work in progress (being performed by Capital Projects Funds) Infrastructure assets (see next slide)

13-25 General Capital Assets: Infrastructure Assets  Capitalization is mandatory for public domain or “infrastructure” capital assets such as: Streets and roads Sidewalks Bridges and tunnels Water and sewer systems Lighting systems  Characteristics of infrastructure Stationary in nature Normally preserved longer than other capital assets.

13-26 General Capital Assets: Post-capitalization Periods  Depreciation is mandatory— except for certain infrastructure assets: Depreciation Expense is never reported in the operating statement of governmental funds. It is reported only in the two government-wide statements.  Sales of Assets: record proceeds as other financing sources in General Fund.

13-27 General Long-term Liabilities  Examples of Debt Recorded in GCA-GLTL general ledger General obligation bonds (usually issued to pay for capital projects). Claims and judgments. Compensated absences (vacation & sick pay). Unfunded pension contributions. Capital leases payable. Special assessment debt having government commitment (explained earlier).

13-28 General Long-term Debt Liabilities  Liquidation of GLTL Debt Issuance Liabilities: at the maturity date, the liability is transferred to a Debt Service Fund. Nondebt Issuance Liabilities: at the payment date, the liability is transferred to the General Fund.  Note that the GLTL is not removed from the GCA-GLTL general ledger when it becomes a current liability (due within 12 months).

13-29 Practice Quiz Question #3 Which of the following statements is true? a.Long-term debt resides permanently in the debt service fund. b.The GCA-GLTL General Ledger services interest payments on long-term debt. c.Special assessments are levied against the general population. d.A debt service fund only makes interest and principal payments. e.Debt service funds accrue liabilities as incurred. Which of the following statements is true? a.Long-term debt resides permanently in the debt service fund. b.The GCA-GLTL General Ledger services interest payments on long-term debt. c.Special assessments are levied against the general population. d.A debt service fund only makes interest and principal payments. e.Debt service funds accrue liabilities as incurred.

13-30 Practice Quiz Question #3 Which of the following statements is true? a.Long-term debt resides permanently in the debt service fund. b.The GCA-GLTL General Ledger services interest payments on long-term debt. c.Special assessments are levied against the general population. d.A debt service fund only makes interest and principal payments. e.Debt service funds accrue liabilities as incurred. Which of the following statements is true? a.Long-term debt resides permanently in the debt service fund. b.The GCA-GLTL General Ledger services interest payments on long-term debt. c.Special assessments are levied against the general population. d.A debt service fund only makes interest and principal payments. e.Debt service funds accrue liabilities as incurred.

13-31 Learning Objective 4 Make calculations and record journal entries for permanent funds.

13-32 The Governmental Funds: Permanent Funds (#5 of 5)  Permanent Funds: Are established when there is a donor restriction requiring that the fund principal be preserved and the income from these permanent funds be used to benefit the government’s programs or its general citizenry.  The accounting for permanent funds is similar to that of the general fund.

13-33 Practice Quiz Question #4 Which of the following is NOT true about permanent funds? a.The principal of permanent funds is usually required to be preserved. b.The income from permanent funds is usually allowed to be spent for the benefit of the governmental entity and its citizens. c.Permanent funds are accounted for in the general fund. d. The accounting for permanent funds is similar to the accounting in the general fund. e. Permanent funds usually have donor restrictions. Which of the following is NOT true about permanent funds? a.The principal of permanent funds is usually required to be preserved. b.The income from permanent funds is usually allowed to be spent for the benefit of the governmental entity and its citizens. c.Permanent funds are accounted for in the general fund. d. The accounting for permanent funds is similar to the accounting in the general fund. e. Permanent funds usually have donor restrictions.

13-34 Learning Objective 5 Understand and explain how governmental funds are reported and rules for separate reporting as major funds. Understand and explain how governmental funds are reported and rules for separate reporting as major funds.

13-35 Governmental Funds Financial Statements  Required financial statements 1. The Governmental Funds Balance Sheet 2. The Governmental Statement of Revenues, Expenditures, and Changes in Fund Balance.  These statements are prepared for each individual governmental fund These individual fund statements are the foundation for the financial statements prepared for the governmental entity.

13-36 Governmental Funds Financial Statements  Major funds must be reported in separate columns  GASB 34 specifies that the general fund is always a major fund.  Major funds: revenues, expenditures or expenses, assets, or liabilities >= 10% of the total for their fund category or type (governmental or enterprise) and 5% of the aggregate amount for all governmental and enterprise funds  Nonmajor funds are Aggregated and reported in a separate column (labeled “other governmental funds”).

13-37 Practice Quiz Question #5 Which of the following is NOT true about governmental reporting? a.The special revenues fund is always a major fund. b.Non-major funds are aggregated and reported in a single column. c.The general fund is always a major fund. d.Major funds are defined as those that constitute at least 10% of their fund category or 5% of all funds. Which of the following is NOT true about governmental reporting? a.The special revenues fund is always a major fund. b.Non-major funds are aggregated and reported in a single column. c.The general fund is always a major fund. d.Major funds are defined as those that constitute at least 10% of their fund category or 5% of all funds.

13-38 Learning Objective 6 Make calculations and record journal entries for enterprise funds.

13-39 The Proprietary Funds: Enterprise Funds  Enterprise Funds account for activities that provide services primarily to the public Examples: Gas, electric, water utilities  Accounting like business accounting. Measurement focus on all economic resources and the accrual basis of accounting. Report fixed assets, which are depreciated, and long-term debt. Focus on income determination and capital maintenance.

13-40 Practice Quiz Question #6 Which of the following statements is true about enterprise funds? a.The activities accounted for in enterprise funds primarily benefit other government units. b.The accounting for enterprise funds is similar to the accounting for businesses. c. Enterprise never report long-term assets or depreciation. d. A maintenance service center for public busses other city vehicles is an example of an activity accounted for in an enterprise fund. Which of the following statements is true about enterprise funds? a.The activities accounted for in enterprise funds primarily benefit other government units. b.The accounting for enterprise funds is similar to the accounting for businesses. c. Enterprise never report long-term assets or depreciation. d. A maintenance service center for public busses other city vehicles is an example of an activity accounted for in an enterprise fund.