Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin
FAR STUDY GROUP
 CPAnet Forum : FAR STUDY GROUP
Subject Topic: Confusion over government-wide FS (Topic Closed Topic Closed) Post ReplyPost New Topic
  
Author
Message << Prev Topic | Next Topic >>
KMirgAZ
Major Contributor
Major Contributor


Joined: 01 Apr 2009
Location: United States
Online Status: Offline
Posts: 413
Posted: 29 Oct 2010 at 15:32 | IP Logged  

So in F9 (Becker) I'm reading that government-wide financial statements require the use of the economic resources measurment focus and the full accrual basis of accounting for the stmt of net assets and the stmt of activities. However, the government funds (the GRaSPP funds) follow the modified accrual basis of accounting. This confuses as the fund accounting follows one method (modified accrual) while the government wide F/S follow another method (full accrual). I'm assuming that there is some sort of reconciliation as the fund accounting doesnt report fixed assets or long term debt while the government-wide financials would.

Can anybody explain this?

Thanks!  



__________________
Kevin
-----
BEC: 79
AUD: 72,84
REG: 88
FAR: 69,77
Ethics: 01/2010
Back to Top View KMirgAZ's Profile Search for other posts by KMirgAZ
 
KMirgAZ
Major Contributor
Major Contributor


Joined: 01 Apr 2009
Location: United States
Online Status: Offline
Posts: 413
Posted: 29 Oct 2010 at 15:51 | IP Logged  

NM, I found my answer!



__________________
Kevin
-----
BEC: 79
AUD: 72,84
REG: 88
FAR: 69,77
Ethics: 01/2010
Back to Top View KMirgAZ's Profile Search for other posts by KMirgAZ
 
tetsuwangatomu
Regular
Regular


Joined: 08 Oct 2010
Location: United States
Online Status: Offline
Posts: 133
Posted: 31 Oct 2010 at 03:10 | IP Logged  

I will try to explain it anyway as a practice before my real exam (in case of a WC you never know right?)

1. How is the Economic Resources measurement focus (aka accrual accounting) done?

Economic Resources measurement focus is accomplished using the accrual basis of accounting where revenue are recorded when earned and expenses are recorded with incurred. (different from Modified Accrual accounting , aka CURRENT financial resources measurement focus when readers are focused on the sources, uses, and balances of CURRENT financial resources that often include a budgetary element. )

2. GASB#34 reporting model focuses the reader on BOTH Goverment-wide AND fund financial statements using an INTEGRATED APPROACH to highlight both THE OPERATIONAL & FISCAL accountability requirements of the government. (aka Consolidation of the two)

Basic structure includes the presentation of:

1)Basic Financial statments (Government-wide financial statments AND Fund Financial Statements);

2)Notes to the financial statements

3)Required supplemental information.

- Fund financial statments emphasize fiscal accountability;

-Government-wide financial statements emphasize operational accountability.

Define accountability: Accountability - the “process that requires us to disclose fully and truthfully our performance to those who are entitled to know,” according to the Honorable Maurice McTigue – is one of the cornerstones of the Republican form of government.

Define fiscal: Of or relating to public revenues, public expenditures, and public debt; public financial matters.

GASB#34">GASB#34 ANATOMY

Because of the different measurement focus and related basis of accounting used, the governmental fund balance as reported in the balance sheet must be reconciled to net assets of government-wide satments as reported in the statement of net assets.

-The difference in measurement focus provides the following reconciling items:

1) Add non-current assets

2) Substract non-current liabilities

3)Add internal service fund net assets

-The difference in basis of accounting produces the following reconciling items:(GALS-BARE)

1) Adjust for accrual of revenue accounted for on the full accrual basis of accounting rather than the modified accrual basis of accounting;

2) Adjust for accural of expenses accounted for on the full accrual basis of accounting rather than the expenditures accured on the modified accrual basis of accounting.

The changes in fund balance displayed in the governmental fund statement of revenues, expenditures and changes in fund balances must be reconciled to changes in net assets of the governmental activities column as reported in the STATMENT OF ACTIVITIES OF THE GOVERNMENT-WIDE STATMENT:(GOES-BARE)

-The difference in measurement focus produces the following reconciling items:

1)Substract debt proceeds (accounted for as other financing sources in fund statement)

2)Add Capital outlay (not accounted for as expense)

3)Add Internal Service Fund changes in net assets accounted for in the proprietary funds)

-The difference in basis of accounting produces the following reconciling items:

1) Adjust for accrual of revenue accounted for on the accural basis of accouting rather than the modified accrual basis of accounting.

2) Adjust for accrual of expenses accounted for on the accrual rather than modified accrual.

 

To remember GALS - BARE & GOES-BARE

Balance Sheet:

GALS-BARE = GRaSPP - fund balance + Noncurrent Assets - Noncurrent liabilities + Service (Internal) Fund Net Assets <->( B)asis of accounting ->Adjusted for (A)ccrued (R)evenue and (E)xpenses 

Stmt of Rev, Expenditures and Changes in Fund Balance:

GOES-BARE = GRaSPP - Net change in fund balance -> less (O)ther financing sources + (E)xpenditure (Capital outlay) + (S)ervice (Internal) Fund Net Income and (B)asis of accounting -> Adjusted for (A)dditional (A)ccrued (R)evenues and (E)xpenses

 

Matrix of GASB#34 Reporting:

Governmental         Business Type         &n bsp;      Excluded

____________         ____________                 _______

GRSPP      S           ;       E           ;           ;         PAPI

 

Government-wide financial statments are the:

1) Statement of Net Assets;

2) Statement of Activities.

Man, I am exhausted now but satisfied and feeling accomplished.

 



__________________
Work Harder, that's all.
Don't post copyrighted stuff that we don't own here.
Back to Top View tetsuwangatomu's Profile Search for other posts by tetsuwangatomu
 
tetsuwangatomu
Regular
Regular


Joined: 08 Oct 2010
Location: United States
Online Status: Offline
Posts: 133
Posted: 31 Oct 2010 at 03:45 | IP Logged  

GASB stands for Governmental Accounting Standards Board. In June 1999, GASB Statement 34 (or GASB 34) was published. GASB 34 requires state and local governments to begin reporting all financial transactions, including the value of their infrastructure assets, roads, bridges, water and sewer facilities, and dams, in their annual financial reports on an accrual accounting basis.

http://www.ctre.iastate.edu/gasb34/gasb341.pdf 

Some 11 years ago GASB#34 was born, The baby was born and creating tons of jobs for Accountants!

 

 

 

Sarbanes–Oxley Act

, Another little guy that needs attention that were tested heavily too. 

Sarbanes–Oxley Act - the law



__________________
Work Harder, that's all.
Don't post copyrighted stuff that we don't own here.
Back to Top View tetsuwangatomu's Profile Search for other posts by tetsuwangatomu
 



Sorry, you can NOT post a reply.
This topic is closed.


  Post ReplyPost New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Powered by Web Wiz Forums version 7.9
Copyright ©2001-2010 Web Wiz Guide

This page was generated in 0.1250 seconds.

Copyright © 1996-2016 CPAnet/MizWeb Communities All Rights Reserved
Twitter
|Facebook |CPA Exam Club | About | Contact | Newsletter | Advertise & Promote