1. Fund Balance Reporting and Governmental Fund Type Definitions
Robert M. Apple, CPA, MSA

2. Fund Balance Reporting and Governmental Fund Type Definitions
Understanding GASB statement number 54

3. Certified continuing professional education class
1-hour credit
Must remain for the entirety of the class to receive CPE credit
Must sign in and sign out to receive CPE credit
Certificates of attendance will be ed for CPE credit

4. Fund Balance Reporting and Governmental Fund Type Definitions
Who/what are Governmental Accounting Standards Board (GASB) and Generally Accepted Accounting Principles (GAAP)?
Clearer definitions of governmental fund types
Establish clear fund balance classifications
Observing governmental reported resources
Effective June, 2010

5. What is GAAP? Proper accounting Decades of accounting practice
No authoritative book

6. What is GAAP? Does not account for every situation
Make the best choice
Rule makers leave room for options

7. What is GAAP? The grey area of materiality Qualitative aspects
Quantitative aspects

8. Who Sets Up GAAP? GASB sets the GAAP rules GASB provides:
Accounting principles
Interpretations
Guidance for implementation

9. GASB Statement No. 76 Category A Category B GASB Statements
GASB Technical Bulletins
GASB Implementation Guides
American Institute of Certified Public Accountants (AICPA) literature cleared by GASB

10. GASB Statement No. 76 If not Specified in Category A or B
AICPA literature not cleared by the GASB
Practices widely practiced by state and local government agencies
Literature from professional organizations, regulatory agencies, and authoritative accounting texts

11. Statement Objective
GASB Statement No. 54

12. Statement Objective
GASB Statement No.34 clarity – Basic Financial Statements and MD&A
Clearer fund balance classifications.
Fund balance information consistently applied
Clarifying existing governmental fund type definitions

13. Part 1 Fund Balance Reporting
GASB Statement No. 54

14. Nonspendable Fund Balance Fund Balance Reporting
GASB Statement No. 54

15. Nonspendable Fund Balance
Identify amounts that cannot be spent
Assets not expected to be converted to cash
Inventories
Prepaid amounts
Long-term loan receivable
Property acquired for resale

16. Nonspendable Fund Balance
Cannot be spent because
Legally required to be maintained intact
Permanent fund as example
An endowment
Principal has to remain intact but interest can be spent

17. Restricted Fund Balance Fund Balance Reporting
GASB Statement No. 54

18. Restricted Fund Balance
GASB 34: Specific purposes stipulated by
Constitutional law provisions
External resource providers (e.g., creditors or grantors)
Enabling legislation mandating resources used for a specific purpose

19. Committed Fund Balance Fund Balance Reporting
GASB Statement No. 54

20. Committed Fund Balance
Used only for specific purposes
Determined by government’s decision making authority
Can be changed and redeployed through legislation

21. Assigned Fund Balance Fund Balance Reporting
GASB Statement No. 54

22. Assigned Fund Balance Used for specific purposes
Didn’t meet criteria for restricted or committed
Does not require the highest level of decision-making authority

23. Assigned Fund Balance
Includes all remaining amounts except for negative balances
Negative balances - discussed later in classifying fund balance amounts
Specific purpose amounts in the general fund

24. Unassigned Fund Balance Fund Balance Reporting
GASB Statement No. 54

25. Unassigned Fund Balance
Residual classification for the government’s general fund
Spendable amounts not contained in other classifications
Deficit balance for all other funds from overspending

26. Disclosures Processes through which constraints are imposed on amounts
Committed classifications
Assigned classifications

27. Classifying Fund Balance Amounts Fund Balance Reporting
GASB Statement No. 54

28. Classifying Fund Balance Amounts
Required and appropriate classification and amounts of residual balances
Disclose accounting policies of spending for
Restricted
Assigned
Or Unassigned

29. Classifying Fund Balance Amounts
Can result in a negative balance
Amounts assigned to other purposes in that fund reduced to eliminate deficit
Negative residual amount classified as unassigned fund balance

30. Stabilization Arrangements Fund Balance Reporting
GASB Statement No. 54

31. Stabilization Arrangements
Setting aside resources to withstand unexpected revenue shortfalls or expenditure needs
Classifying on the balance sheet as committed or restricted
Disclosures on stabilization arrangements
Describe and identify specific circumstances

32. Displaying Fund Balance Classifications on the Face of the Balance Sheets Fund Balance Reporting
GASB Statement No. 54

33. Nonspendable Fund Balance
Two components of nonspendable fund balance
Not in spendable form
Legally or contractually required intact or
Presented in aggregate

34. Restricted Fund Balance
Distinguishing major purposes or
Displayed in aggregate

35. Committed and Assigned Fund Balances
Displayed in sufficient detail or
Each classification displayed in aggregate

36. Part 2 Fund Balance Disclosures
GASB Statement No. 54

37. Fund Balance Classification Policies and Procedures Fund Balance Disclosures
GASB Statement No. 54

38. Fund Balance Classifications Policies and Procedures
Committed fund balance
Who is the government’s highest level of decision-making authority
What is the required action to modify

39. Fund Balance Classifications Policies and Procedures
Assigned fund balance
Who is the official or body authorized to assign amounts
Policy established by governing body authorization given to

40. Fund Balance Classifications Policies and Procedures
Classification of fund balances
When the government considers amounts to have been spent for expenditures for the purpose of:
Restricted or unrestricted amounts
Committed, assigned, or unassigned amounts

41. Reporting Encumbrances Fund Balance Disclosures
GASB Statement No. 54

42. Reporting Encumbrances
Significant encumbrances by major fund and nonmajor fund in the aggregate
Disclosed in conjunction with other significant commitments

43. Details of Fund Balance Classifications Displayed in the Aggregate Fund Balance Disclosures
GASB Statement No. 54

44. Details of Fund Balance Classifications Displayed in the Aggregate
Amounts for both nonspendable components separately disclosed
Restricted, committed, or assigned fund balances specific purposes disclosed

45. Stabilization Arrangements Fund Balance Disclosures
GASB Statement No. 54

46. Stabilization Arrangements
Disclose the authority establishing
Requirements for additions to the amount
Conditions when may be spent
The balance unless apparent on the financial statements

47. Minimum Fund Balance Policies Fund Balance Disclosures
GASB Statement No. 54

48. Minimum Fund Balance Policies
If adopted in lieu of stabilization amounts
Describe the policy established by the government

49. Part 3 Governmental Fund Type Definitions
GASB Statement No. 54

50. General Fund Governmental Fund Type Definitions
GASB Statement No. 54

51. General Fund
Accounts for and reports all financial resources not accounted for and reported in another fund

52. Special Revenue Funds Governmental Fund Type Definitions
GASB Statement No. 54

53. Special Revenue Funds
Legally established to collect revenue used for a restricted or committed specific project
Specific purpose inflows comprising of
a substantial portion of restricted
or committed inflows making the foundation.

54. Capital Projects Funds Governmental Fund Type Definitions
GASB Statement No. 54

55. Capital Projects Funds
Committed, restricted, or assigned resources
Acquisition or construction of major capital assets that clearly are facilities
Buildings
Building improvements
Infrastructure

56. Debt Service Funds Governmental Fund Type Definitions
GASB Statement No. 54

57. Debt Service Funds
Committed, restricted, or assigned financial resources to expenditure for principal and interest
Legally mandated
Accumulated financial resources for future year maturing of principal and interest

58. Permanent Funds Governmental Fund Type Definitions
GASB Statement No. 54

59. Permanent Funds
Resources restricted to only earnings and not principal
For purposes that support government/citizenry programs

60. Closure Improves financial reporting by providing
Fund balance categories
Easily understood classifications
Required consistency of classifying amounts
Useful disclosures for understanding processes
Definitions reduce uncertainty on reporting

61. Questions?
GASB Statement No. 54