Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level
20478HOU
Description of required financial statements should include the differences between the government wide perspective and the fund perspective.
Condensed government wide information will be in the tradition financial statements format, not the net costs format.
Discussion of overall financial condition should focus on how the financial condition has changed over the past year. 
GASB believe that users want information which is government wide in nature, rather than fund based.  They believe that it demonstrates operational accountability.
The Statements focus on governmental and business type activities of the primary government.
Component units are shown in a separate column.
Accrual basis accounting is used for all activities.
Fiduciary Funds are not reported in the government wide statements.
Assets and liabilities are presented in decreasing order of liquidity.
The purpose of the statement is to show how functional expenditures are first supported by revenues directly charged for those functions and operating grants and contributions, then by the general revenues of the government.
The net of program revenues and expenses are shown as either governmental activities or business types actives.
Extraordinary items - unusual and infrequent
Special items - unusual or infrequent and controllable by management.
Still reported on a modified accrual basis.
Reconciliation of net assets of governmental funds to net assets presented in the government wide statements is required on the fact of this statements.
Fund balance should be either reserved or unreserved.
Extraordinary and special items is a new categorization added to the statement of revenues, expenditures, and changes in fund balances.
Budgetary statement is not part of general purpose financial statements but is required supplementary information.
.
.
In a nonexchange transaction, a government either gives or receives value without directly receiving equal value in exchange.
To illustrate what I mean by directly, let’s look at a simple example.  In a classic exchange transaction, such as buying groceries, I give the grocery store cash and they give me groceries. 
However, when I give the government my income taxes, exactly what do I get in return?
The standard outlines 4 classes of nonexchange transactions.
The standard outlines 4 classes of nonexchange transactions.
Principal characteristics of these transactions:
1) the assessing government imposes the provision of resources on the provider  (the entity that acquires the income, goods or services), and
2) the government’s assessment is on an exchange transaction
These types of tax revenues may be restricted for a particular use. 
Legislation sometimes places purpose restrictions on the use of these revenues.
Legislation also may place a time requirement on when the revenues may be used or when use may begin
Example - a property tax may be required to be used for the period in which the tax is levied.  That period may not be the same period in which the payment is due or the government has a right to place a lien on the property.
One government pays for the programs it requires to be established and run by another government.
Entitlement programs are perhaps the best example of these nonexchange transactions.
May include a time restriction as to when the resources may be used.
Both parties may be governments or one party may be a nongovernmental entity, including and individual.
Often the provider establishes purpose restrictions and eligibility requirements.
Principal characteristics of voluntary nonexchange transactions are:
1)  they are not imposed on the provider or the recipient, and
2)  fulfillment of eligibility requirements is essential for a transaction to occur
Net assets must continue to be reported as restricted until
1) resources are used for their specified purpose
2) as long as the provider requires the resources to be maintained intact (endowment principal)
If eligibility requirements or purpose restrictions which are initially met are later violated, must reverse the amount that the provider is expected to reclaim.
.