23
External Activity and Balances
•External activity and balances
–result of resource flows between the primary government and other external parties
–i.e. vendors, contractors, legally separate discretely presented component units, etc.
•
In the process of aggregating data for the statements of net assets and the statements of activities, some amounts reported as interfund activity and balances in the funds should be eliminated or reclassified.

Eliminations in the statement of activities should be made to eliminate the grossing-up effect.  Interfund receivables and payable should be eliminated in the governmental and business-type activities columns of the statements of net assets, except for the net residual amounts due between governmental and business type activities.  Amounts reported in the funds as receivable from or payable to fiduciary funds should be included as receivables and payables to external parties.  All internal balances should be eliminated in the total column.