Click to edit Master text styles
Second level
Third level
Fourth level
Fifth level
.
KPMG brought together its best and brightest to develop a Government Reporting Implementation Process or GRIP designed to assist in establishing policies and implementing processes to generate GASB 34 financial statements. What sets GRIP apart is its focus on making sure the target develops policies and processes that will allow financial statement preparation long after the GRIP engagement teams leaves.
KPMG brought together its best and brightest to develop a Government Reporting Implementation Process or GRIP designed to assist in establishing policies and implementing processes to generate GASB 34 financial statements. What sets GRIP apart is its focus on making sure the target develops policies and processes that will allow financial statement preparation long after the GRIP engagement teams leaves.
KPMG brought together its best and brightest to develop a Government Reporting Implementation Process or GRIP designed to assist in establishing policies and implementing processes to generate GASB 34 financial statements. What sets GRIP apart is its focus on making sure the target develops policies and processes that will allow financial statement preparation long after the GRIP engagement teams leaves.
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. 
Discussion of known facts addresses only what is present at the date of the letter, not what is expected to happen in the future.
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.
Expenses must be reported at least as detailed as presented in the fund statements. Indirect expenses can be allocated to functional expenses in a separate column prior to netting revenues against the expenses.
Indirect cost allocations should mirror A-87 cost allocation.
Depreciation expenses is a functional expense when the asset being depreciated can be specifically identified with a function.
Depreciation for shared assets should be allocated to the applicable functions.
Depreciation for items that serve all functions, such as city hall, should be included as either a separate line item or as part of general government. Infrastructure deprecation should not be allocated to functional expenditures.  It should be reported in the function normally associated with capital outlays for the respective infrastructure. Interest expense  generally should be reported as a separate line item and not allocated to the functions unless borrowing is essential to the creation or continued existence of a program and it would be misleading to exclude.
Program revenues derived directly from the program itself or from parties outside the reporting government’s taxpayers or citizenry, as a whole; they reduce the net cost of the function to be financed  from the government’ general revenues.  The Statement of activities should separately report three categories of program revenues:  (a) charges for services, (b) program-specific operating grants and contributions, and (c ) program-specific capital grants and contributions. Charges for services include revenues based on exchange or exchange-like transactions.  These revenues arise from charges to customers or applicants who purchase use, or directly benefit from the goods, services, or privileges. Program specific grants and contributions (operating and capital) include revenues arising from mandatory and voluntary nonexchange transactions with other governments, organizations, or individuals that are restricted for use in a particular program.
All revenues are general revenues unless they are required to be reported as program revenues. All taxes, even those that are levied for a specific purpose, are general revenues and should be reported by type of tax - for example, sales tax, property tax, income tax, etc.
Governmental and business-type activities should follow all applicable GASB pronouncement as well as FASB, APB, and ARB pronouncements issued prior to November 30, 1999 unless they contradict with GASB pronouncements.
Business-type activities may also apply FASB pronouncements issued after November 30, 1999 as provided in paragraph 7 of GAB Statement 20.
A permanent fund is a fund in which the income from the fund can be used for the specified purpose; however, the principal of the fund (corpus) can not be expended. An enterprise fund may be used to report an activity where a fee is charged to external users for goods or services.  An activity is required to be reported as an enterprise fund if any one of the following criteria is met: (1) the activity is financed with debt secured solely by the revenue from that activity (2) laws require the activity costs of providing services be recovered through fees and charge from the activity (3) clearly established pricing polices demonstrate that the government is trying to recover its costs through user fees
Internal service funds may be used to report any activity that provides good or services to other funds, departments, or agencies of the primary government and its component units.  Internal service funds should be used only if the reporting government is the predominant participant in the activity.  Otherwise, the activity should be reported as an enterprise fund.
An investment trust fund is used to report external investment pools.
A private purpose trust fund is used to report trust arrangements under which principal and interest are used for specific beneficiaries.
Major funds are presented in separate columns for fund presentations.
Internal service funds are exempt from major fund reporting requirements.
Both the governmental and proprietary funds (excluding internal service) have major fund reporting requirements. 
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.
Proprietary funds use accrual basis of accounting.
Statement of Revenues, Expenses, and Changes in Equity add a caption for extraordinary and special items before net income.
An additional line for additions to permanent endowments and trusts appear before the net change in fund equity.
Capital contributions are recorded as nonoperating revenues, not as contributed capital.
Statement 34 does not modify the guidance in paragraph 51 of Statement 14 for determining which component units are major.  That paragraph states “In determining which component units are "major," consideration should be given to each component unit's significance relative to the other component units and the nature and significance of its relationship to the primary government.”  If a discretely presented component unit does not issue a separate report, what additional reporting is required for that component unit in the entity’s financial statements? Paragraph 50 in Statement 14 requires the reporting entity’s financial statements to include fund-type information for a discretely presented component unit that does not issues a separate report.  Statement 34 amended that requirement to be consistent with the change in the focus of fund-based reporting from fund-type to major funds.  Consequently, if a major component unit does not issue separate financial statements, fund financial statements (including its major funds) for that component unit would be included in the reporting entity’s financial statements as supplementary information.
Paragraph 130 requires a budgetary comparison schedule to be presented for the general fund and each major special revenue fund that has a legally adopted annual budget.  If a special revenue fund does not meet the percentage criteria in paragraph 76 (a) and (b), but is nevertheless reported as a major fund because the “government’s officials believe is particularly important to financial statement users (for example, because of public interest or consistency),” a  budgetary comparison schedule is also required for that “major” special revenue fund.
Should the carryover of encumbrances be included as part of the original budget even though the exact amount of the encumbrances may not be known at the time the budget is adopted ? Yes.  Paragraph 130(a) states that “The original budget should also include actual appropriation amounts automatically carried over from prior years by law. For example, a legal provision may require the automatic rolling forward of appropriations to cover prior-year encumbrances.”  In essence the adopted budget includes a provision to cover prior year encumbrances in whatever amounts they may be.  The amounts will be known by the time the financial statements are issued after the year-end. 
.
.
.
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.
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.
.
.
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.