1. Government and Non-Profit Accounting

2. Accounting Standards for State and Local Governments
WEEK ONE
Accounting Standards for State and Local Governments

3. Learning Objectives After Week 1, you should be able to:
Demonstrate an understanding of why governmental accounting is–and should be–different from for-profit business accounting.
Model the governmental accounting system used to account for revenues, expenditures, encumbrances, expenses, capital, and debt.

4. Compare and Contrast Governmental Accounting and For-Profit Accounting
Missions
Objectives
Characteristics
Absence of a profit motive.
No direct link between revenues and expenses.
No relationship between resources provided and the benefits received.
Restriction on assets.

5. Governing Standard Setting Bodies
The Governmental Accounting Standards Board’s (GASB) Web site at ( provides extensive information about the mission, structure, the due-process it follows in setting standards, and the role of its advisory council.
Financial Accounting Standards Board (FASB) provides information located at its Web site at (

6. Basis of Accounting Financial accounting Governmental accounting
Full accrual
FASB
Governmental accounting
Modified accrual
GASB
Governmental budgets
Cash basis
Commitments

7. Objectives of Financial Reporting
“Accountability is the cornerstone of all financial reporting in government… Accountability requires governments to answer to the citizenry—to justify the raising of public resources and the purposes for which they are used.”
-GASB Concepts Statement No. 1

8. Comprehensive Annual Financial Reports (CAFR)
Purpose of CAFR
Components of CAFR
Uses of CAFR
GASB 34
Reasons for implementation
Advantages and disadvantages
Applies to local and state entities but not the Federal Government
Management Discussion and Analysis (MD&A)

9. Basic Financial Statements Overview
Government-Wide Financial Statements
Statement of Net Assets
Statement of Activities
Governmental Funds Financial Statements
Balance Sheet
Statement of Revenues, Expenditures, and Changes in Fund Balances (GAAP basis)
Statement of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual

10. Basic Financial Statements Overview (Cont.)
Proprietary Funds Financial Statements
Statement of Net Assets (Balance Sheet)
Statement of Revenues, Expenses, and Changes in Net Assets
Statement of Cash Flows
Fiduciary Funds Financial Statements
Statement of Fiduciary Net Assets
Statement of Changes in Fiduciary Net Assets
Notes to the financial statements

11. Questions?