Fundamentals of Governmental Accounting and Reporting

Chapter 10Government-Wide Financial Statements

Learning objectives

• Recognize the format and requirements of the government-wide financial statements.
• Identify steps in the process required to produce the government-wide financial statements.

Constructing government-wide financial statements

Government-wide statements were created with the advent of GASB Statement No. 34, Basic Financial Statement — and Management’s Discussion and Analysis — for State and Local Governments. They are constructed from the information in the fund-based accounting system and other records maintained by a government. However, these statements are more than just a summary of the fund financial statements. They present a different view of the government’s resources. Understanding how they are constructed is an important step in understanding and interpreting government-wide financial statements.

Purpose of the government-wide statements

The purpose of the government-wide financial statements is to demonstrate operational accountability, which is the provision of information about the results of operations and the financial condition of the overall government. The fund financial statements are used to address fiscal accountability.

Operational accountability provides information about the medium and long-term effects of current and past financial decisions. It should assist users in assessing

• the service levels that can be provided from existing revenues,
• the effects of current-period operations ...