Fund Financial Statements
-Governmental (anything other than proprietary)
-Proprietary (business-like activities)
-Fiduciary (holding money in trust for others)
Government Funds
-Permanent
-Capital Projects
-Debt Service
-Special Revenue
-General
Permanent Fund
Accounts for resources that are legally restricted to the extent earnings (but not principal) may be used to support government programs.
Capital Projects
Account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays. Used for construction or acquisition of major long-term assets such as buildings, bridges, etc. for government funds.
Debt Service
Account for and report financial resources that are restricted, committed or assigned to expenditure for principal and interest.
Special Revenue
Accounts for legally restricted revenue sources, other than those restricted for capital projects or debt service.
General
Accounts for all financial resources not required to be reported in another fund.
What is the basis and focus of governmental funds?
-Modified Accrual Basis
-Current Financial Resources Measurement Focus
Modified Accrual Basis vs. Accrual Basis
Modified Accrual - Record revenues when they become available and measurable. Record expenses when they are incurred.
Accrual - Record revenues and expenses when incurred.
What are the sources of revenue for capital project funds?
-Issuance of long-term debt
-Grants from other governmental units
-Proceeds of dedicated taxes
-Transfers from other funds
-Gifts from individuals or organizations
How many capital project funds should you use?
Some jurisdictions may require a separate fund for each building project. But most governments account for all, or at least related construction projects, in a single fund using the "fund within a fund" approach.
Uses of Debt Service Funds
-Sinking fund and payments on bonds
-Payments on long-term notes
-Payments on capital lease
What are the sources of revenue for debt service funds?
-Transfers from general fund
-Taxes earmarked for debt service
-Refinancing bond proceeds
Exception to Modified Accrual Basis
When recording interest and principal on long term debt, record when due.
Encumbrance
When a purchase order or contract is issued as authorized by an appropriation. Not a liability because goods have only been ordered.
Types of Debt
-Serial Bonds
-Term Bonds
-Deferred Serial Bonds
Serial Bonds
Money is transferred in, payments are made, and little or no balance exists at year end.
Term Bonds
All the principle of the bond comes due at the end of the term. Interest may be paid over time, or all at the end as well.
Deferred Serial Bonds
Theses may not start the payments for 2 to 5 years after the bonds are used. Allows time for property taxes to begin coming in before payments start.
What is the difference between a special revenue fund and a permanent fund?
Permanent - Trust used to benefit the government or its citizenry and is non-expendable (earnings ONLY may be expended for the purpose provided).
Special Revenue - Trust used to benefit the government or its citizenry and is expendable (earnings AND princ
Balance Sheet Presentation
Must present separate columns for the general fund, each major fund, and a single column for nonmajor funds.
What is the basis and focus of proprietary funds?
-Accrual Basis
-Economic Resources Measurement Focus.