I am using Becker. The topic of reconciliation from fund statements to the government-wide finance statements confused me.

For the fund revenue, expenditure, and exchange in fund balance, how should I treat the transfer in and out under the other finance sources?

For my understanding, the transfer in and out should not be recorded under P/L in full accrual basis. Instead, they should be eliminated as interfund activities. But in Becker's example, F9-24 to F9-25, the reconciliation does not include them.

Anyone can tell me why I am wrong?

Hey globalfish (cool name btw),

I'm only on chapter 8 in Becker, but I did just watch the lecture on F9.  So, I don't know if this is correct, but I think it is:

If you look at F9-21 at the top of the page, you'll see the mnemonic "G.O.E.S" for the reconciliation of the I/S.  Under this mnemonic, the "O" is for "Other Financing Sources" and you are supposed to subtract this in the reconciliation.  This is what you are referring to, right?

Well, on page F9-25, our good friend Tim Gearty had us write "G.O.E.S" down the side of the reconciliation.  The "O" lines up with the second line item on the reconciliation: "Bond proceeds reflected as debt in excess of payments."  Note that this is a subtraction of $1,720,000, and I'm pretty sure that it is your "other financing sources" on the reconciliation.

You're a bit ahead of me though, so I don't know for sure.  Let me know if I'm right.

Hi Interpol CPA,

Thanks for your explanation. But I am still confused with it.

If you look at F9-18, the government-wide statement of activities. We can see there are only three types of revenues. The Charges for services, operating grants and contributions, and the capital grants and contributions.

Looking back to the the reconciliation we are discussing. If we do not include the transfer in in the reconciliation, then where should we put it? There is no other financing sources in the government-wide statement of activities. Either it cannot be treated as revenue. How should we treat it then?

I am not sure if I am correct. Pleaes let me know if you have other ideas.

And hope you can pass your last course.

ummm, yeah I obviously needed to take a closer look.  Like I said, I haven't quite gotten here yet (and Gov't/NFP are all new to me).  Sorry...

I actually see what you are confused about now.  Will you give me a second chance?  Here goes:

If you look at F9-24 under "Other Financing Sources" you will see total Transfers In of $465,000 and Transfers Out of $(384,000).  Please note that these net to $81,000.

On F9-25, you are correct that these transfers are not included on the reconciliation.  From my understanding, this is because these transfers ARE INCLUDED in the government-wide statement of activities.  Therefore, they should not be subtracted out in the reconciliation.

If you look at F9-18 at the government-wide statement of activities, you will see toward the bottom a section for "General revenues."  In this section is included "Transfers" for $81,000.  Note that the 3 types of revenues that you list in your post above are the "Program" revenues which do not include these "General revenues."  The net Program revenues of $(2,435,500) and the total general revenues/transfers of $2,731,000 net out to $295,500, which ties to the reconciliation on F9-25.

Hope this helps.

Interpol CPA,

You know, you are a genius. I discussed this question with a friend who scored 94 in FAR, but still no answer. Here you solved it!

Thank you very much and I am sure that you will beat this exam this time. Wish you a lucky exam!