1. Governmental & NPO Accounting-2008 1-1 Session 1-Government Accounting--Basics n GASB and other key terms n Uniqueness of government operations n Objectives of government reporting n Modified accrual basis n Fund areas (3) and types (11) n Budgetary accounting

2. Governmental & NPO Accounting-2008 1-2 GASB & Other Key Terms n GASB: Governmental Accounting Standards Board n www.gasb.org n FASAB: Federal Accounting Standards Advisory Board n www.fasab.org n GFOA: Government Finance Officers Association n www.gfoa.org n Publishes the GAAFR or “Blue Book”: Governmental Accounting, Auditing and Financial Reporting n Government GAAP hierarchy (24-1) n GAS 34 n Fund financial statements n Government-wide financial statements

3. Governmental & NPO Accounting-2008 1-3 Uniqueness of Government Operations n Absence of a profit motive n Legal requirements (and environment) n Diversity of activities n Government n Business or proprietary n Fiduciary n Use of fund accounting n Different terms, concepts and reporting format

4. Governmental & NPO Accounting-2008 1-4 Objectives of Government Reporting n Provides public accountability n Evaluates operating results n Assesses level of services and ability to meet obligations

5. Governmental & NPO Accounting-2008 1-5 Modified Accrual Basis n Two concepts of measurement n Economic resource flows, and n Current financial resource flows n Most governmental accounting follows the accrual basis of accounting, however… n Current financial resource flows implies a form of cash basis accounting n Property taxes must be “available and measurable” (see page 799)

6. Governmental & NPO Accounting-2008 1-6 Fund Areas n Governmental funds: government operations n Proprietary funds: quasi-commercial activities n Fiduciary funds: agency activities for the benefit of 3 rd parties and n General capital assets and general long-term liabilities ledger (GCA-GLTL)

7. Governmental & NPO Accounting-2008 1-7 Government Funds n General fund: general activities n Special revenue fund: specific revenue activities n Capital projects fund: major facility construction activities n Debt service fund: long-term debt service activities n Permanent fund: restricted resource activities

8. Governmental & NPO Accounting-2008 1-8 Proprietary Funds n Enterprise funds: fee-based business activities n Internal service funds: support activities

9. Governmental & NPO Accounting-2008 1-9 Fiduciary Funds n Pension trust funds: benefit activities n Investment trust funds: pooled investment activities n Private-purpose trust funds: other trust activities n Agency funds: custodial activities

10. Governmental & NPO Accounting-2008 1-10 Budgetary Accounting n Budgetary accounting: statutory authorization/approval of spending based on estimated revenues n Reflective of a “balanced budget” n Special consideration in general ledger n Provides instant source of comparison—How much do I have left to spend? n Appropriations vs. expenditures and encumbrances n Key terms n Appropriation: approved spending n Encumbrance: committed spending (i.e. purchase order) n Expenditure: incurred spending (i.e. goods received) n Disbursement: payment

11. Governmental & NPO Accounting-2008 1-11 Typical Transactions- Session 2 1. Adoption of the budget 2. Property taxes 3. Revenue other than property taxes 4. Expenditures & encumbrances other than inventory 5. Acquisition and consumption of inventory 6. Disbursements 7. Inter-fund transactions 8. Closing entries-general 9. Closing entries-encumbrances 10. Fund balance reserves