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

Slides:



Advertisements
Similar presentations
College and University Accounting—Private Institutions
Advertisements

IPSAS Financial statements
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.
Not-For-Profit Organizations Governmental State and Local Government City of Martin County of Weakley State of Tennessee Special School Districts Madison.
Fund Accounting -- Government Entities Hartwell C. Herring III University of Tennessee.
Advanced Accounting, Fourth Edition
Fiduciary Funds n Used to account for funds held by Govt entity as a Trustee or Agent n Uses Accrual basis of accounting and Economic Resources measurement.
McGraw-Hill/Irwin©2007, The McGraw-Hill Companies, All Rights Reserved Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter.
Principle #1 - Accounting and reporting capabilities
Unique Aspects of Accounting Local Governments – Part I:
McGraw-Hill/Irwin©2007, The McGraw-Hill Companies, All Rights Reserved Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter.
2 Chapter Fund Accounting.
Chapter 10 Accounting for Fiduciary Funds and Permanent Funds.
Advanced Accounting by Debra Jeter and Paul Chaney Chapter 19: Introduction to Accounting for State and Local Governmental Units Slides Authored.
NFP Acctg. Concepts - 1 NOT-for-PROFIT ACCOUNTING Basic Concepts.
Personal Financial Statements and Accounting for Governments and Not-For-Profit Organizations Chapter 13 © 2011 Cengage Learning. All Rights Reserved.
Advanced Accounting, Fourth Edition
© 2003 The McGraw-Hill Companies, Inc., All Rights Reserved Chapter 17 Governmental Entities: General Fund.
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.
McGraw-Hill/Irwin Copyright © 2005 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 17 Governmental Entities: Introduction and General Fund.
©The McGraw-Hill Companies, Inc. 2006McGraw-Hill/Irwin Chapter 18 Governmental Entities: Other Governmental Funds and Account Group.
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.
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.
Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 7 Fiduciary Funds McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill.
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
City Council Meeting Presentations.  Part I – Regulations and Terminology May 17, 2011  Part II – Revenues June 7, 2011  Part III – Fund Descriptions.
Chapter 2: Fund Accounting Nature of Funds & Account Groups Comprehensive Annual Financial Report Exposure Draft Changes Not-for-Profit Funds and Financial.
Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 9 Accounting for Special Purpose Entities, Including Public Colleges.
1 FUND ACCOUNTING Chapter Two. 2 Learning Objectives After studying Chapter 2, you should understand:  The nature of funds.  The hierarchy classification.
Chapter 21 FUND ACCOUNTING Chapter Two. Chapter 22 Learning Objectives After studying Chapter 2, you should understand :  The nature of funds  The three.
© 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.
Chapter 11 College and University – Private Institutions
Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter 12 Governmental Entities: Introduction and General Fund.
9-1 Chapter 9 Financial Reporting. 9-2 Overview of Financial Reporting Financial reporting entity Governmental entities defining the entity determining.
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.
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.
MGT 497 Financial Statements Prof. Rick Hayes, Ph.D., CPA.
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.
Essentials of Accounting for Governmental and Not-for-Profit Organizations Chapter 11 College and University – Private Institutions Copyright © 2015 McGraw-Hill.
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.
PREPARE THE FOUR FINANCIAL STATEMENTS 1. INCOME STATEMENT 2. RETAINED EARNINGS STATEMENT 3. BALANCE SHEET 4. CASH FLOW STATEMENT.
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 9 Accounting for Special Purpose Entities, Including Public Colleges.
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.
Accounting for State and Local Governments (Part 2)
Chapter 9 Financial Statements.
Government and Non-Profit Accounting
Accounting for Governmental & Nonprofit Entities
State and Local Government Accounting Principles
Governmental Accounting GOALS
งบกระแสเงินสด(Statement of Cash Flows)
Beams, Advanced Accounting 10e, Ch. 20
Accounting for Assets Cash Flows.
A Walkthrough of Government Financial Statements
Presentation transcript:

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

2 Proprietary Funds Enterprise Funds Internal Service Funds

3 Enterprise Funds Account for commercial-type activities of a governmental entity. Are used to account for operations that are financed and operated in a manner similar to private business enterprises. Examples are: Public Utilities (water companies and electric companies), Airports, Public Hospitals, Transportation systems.

4 Accounting and Reporting for Enterprise Funds Enterprise use the accrual basis of accounting. Neither budgetary accounts nor encumbrances are recorded in enterprise fund. Enterprise fund must be accounted for in the same manner as a privately owned commercial business.

5 Accounting and Reporting for Enterprise Funds Among the ways in which financial statements of a governmental entity's enterprise fund differ from financial statements of a business enterprise are – the absence of property taxes expense – the absence of capital stock – the presence of restricted assets (segregated from Current Assets) – the presence of liabilities payable from restricted assets.

6 Accounting and Reporting for Enterprise Funds The operating transfers section of an enterprise fund's statement of revenues, expenses, and changes in retained earnings includes subsidy-type transfers to the governmental entity's general fund, and the

7 Accounting and Reporting for Enterprise Funds Statement of cash flows for an enterprise fund has four categories of cash flows. 1. From operating activities 2. From non capital financing activities 3. From capital and related financing activities. 4. From Investing activities.

8 Accounting and Reporting for Enterprise Funds Operating income, rather than increase (decrease) in net assets is reconciled to net cash provided by operating activities. Non capital financing activities cash flows include operating grants from other governmental entities and operating transfers to or from other funds of the governmental entities. Temporary investments of cash received from borrowings for plant assets are reported as cash flow from capital and related financing activities, rather than with cash flows from investment activities.

9 Internal Service Funds Internal service funds are established to finance and account for services and supplies provided exclusively to other government entity. This fund is created to ensure uniformity and economies in the procurement of supplies and services for the governmental entity as a whole

10 Internal Service Funds. Examples are: – Central Garage and motor pools – Central Printing and duplicating services – Central Repair shops The operational of internal service funds resemble those of a business enterprise, except that internal service funds are not profit motivated.

11 Accounting of Internal Service Funds Financial statements of internal service funds are nearly identical in form and content to financial statements of business enterprises because internal service funds do not issue revenue bonds or receive contributions or deposits from customers, as do enterprise funds

12 Accounting and Reporting for Internal Service Funds This fund use the accrual basis of accounting. Neither budgetary accounts nor encumbrances are recorded in this fund. Internal Service fund must be accounted for in the same manner as a privately owned commercial business.

13 Accounting and Reporting of Internal Service Funds Similar to Enterprise Funds, internal service funds do not have owner’s equity in their statement of new assets. A net assets ledger account balance typically supports that amount in the liabilities and net assets section of the statement of new assets for an internal service fund.

14 Financial Statements of Internal Service Funds Balance Sheet Income Statement- Statement of Revenues and Expenses Statement of Cash Flows Footnotes

15 Applicability of FASB Pronouncements to Proprietary Funds GASB Statement No. 20, "Accounting and Financial Reporting for Proprietary Funds..., " provided temporary guidance to governmental entities for applying business enterprise-type accounting standards, as appropriate, to their proprietary funds.

16 Fiduciary Fund Fiduciary Fund consists of – agency funds – private-purpose trust funds – pension trust funds and – investment trust funds The position of a governmental entity with respect to fiduciary funds is that of a custodian or trustee rather than an owner.

17 Accounting of Fiduciary Fund Fiduciary Fund use the accrual basis of accounting. Neither budgetary accounts nor encumbrances are recorded in enterprise fund. For Fiduciary Fund, GASB has mandated preparation of a statement of fiduciary net assets and a statement of changes in fiduciary net assets.

18 Accounting and Reporting of Agency Funds Agency funds are of short duration. Agency Funds are used to accounts for sales taxes collected by a state government on behalf of municipalities and townships of state. Do not have operations during a fiscal year. Only a statement of fiduciary assets and a statement of changes in fiduciary assets are issued for agency funds.

19 Financial statements of Fiduciary Fund Statement of Fiduciary Assets. Assets Cashxxx Liabilities Vouchers Payablexxx Statement of Changes in Assets & Liabilities Open.BalAdditionsDeductionsCl.Balance Assets xxx xxx xxx xxx Liabilities xxx xxx xxx xxx

20 Private Purpose Trust Fund Both a statement of fiduciary net assets and a statement of changes in fiduciary net assets are issued for private-purpose trust funds There are three types of trust funds: 1. Pension Trust funds 2. Nonexpendable Trust funds 3. Expendable Trust funds

21 Expendable and Nonexpendable Private Purpose Trust Expendable: An expendable private-purpose trust fund is one whose principal and income both may be expended to achieve the objectives of the trust. It is classified further as a permanent (governmental) fund, in which the agreement must specify the income from the investment of assets be utilized for benefit of government and its citizens as a whole. Principal of the assets in the fund is legally restricted and cannot be expended.

22 Expendable and Nonexpendable Private Purpose Trust Non Expendable: – Only the revenues of a non-expendable private-purpose trust fund may be expended; – the principal of such a fund must be maintained intact. – Accordingly, a nonexpendable private-purpose trust fund requires two separate accounting units  one for principal and one for revenues. – It is classified as a Proprietary (Fiduciary) Fund in which the agreement specifies the principal and/or income for the benefit of individuals, private organizations, or other governments.

23 Pension Trust Funds Pension Trust Fund use the accrual basis of accounting. (no budget and no encumbrances are used) Pension trust funds account for assets, liabilities, and net assets reserves of defined benefit pension plans of governmental entities, which require actuarial assumptions as to life expectancies of governmental entity employees and rates of earnings on pension trust fund assets

24 Financial Statements of Pension Trust Funds Statement of Plan Net Assets Statement of Changes in Plan Net Assets Schedule of Funding Progress Statement of Cash Flow (optional)

25 Investment Trust Funds Sponsoring governments are required by GASB Statement No. 31, “Accounting and Financial Reporting for... External Investment Pools,” – to establish investment trust funds for investments of smaller governmental entities entrusted to the sponsoring government for investments in higher- yielding financial instruments than the smaller governmental entities have the capacity to acquire.

26 Financial Statements of Investment Trust Funds Statement of Plan Net Assets Statement of Changes in Plan Net Assets Schedule of Funding Progress Statement of Cash Flow (optional)

27 Comprehensive Annual Financial Report Components of the comprehensive annual financial report issued by state and local governmental entities are – an introductory section; – a management discussion and analysis; – basic financial statements; – required supplementary information; and – combining and individual fund statements, schedules, narrative explanations, and statistical section.