Chapter 8Fund Financial Statements

Learning objectives

  • Identify major funds for reporting purposes.
  • Recognize the format and requirements of governmental fund financial statements.
  • Recognize the format and requirements of proprietary fund financial statements.
  • Identify fiduciary fund financial statements.

Refer to appendix A for financial statement samples.

Reviewing fund performance

Fund financial statements provide important information on how the separate components (funds) of a government performed for the year. How much was received, spent, and what remains for a certain purpose can best be determined with fund financial statements. These statements are also used to determine compliance with finance-related laws, rules, and regulations. Through the budget process, governments often make resource-allocation decisions on a fund-by-fund basis. To demonstrate accountability, governments must likewise provide financial information on a fund-by-fund basis.

General-purpose financial statements

The financial statements for governments include both fund-based and government-wide statements. Generally accepted accounting principles (GAAP) require that the general-purpose external financial statements contain, at minimum, the following elements:

  • Management’s discussion and analysis (MD&A)
  • Basic financial statements
    • Government-wide financial statements
    • Fund financial statements
    • Notes to the financial statements
  • Required supplementary information (RSI) (other than MD&A)

The ...

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