Focus on: Governmental (State and Local) Accounting—Module 21
GOVERNMENTAL (STATE AND LOCAL) ACCOUNTING
Governmental Accounting and Standards Board (GASB) Concept Statements set forth fundamentals on which governmental accounting and reporting standards will be based
Objective of governmental accounting and reporting—accountability
- Provide useful information
- Benefit wide range of users
Concepts Statement No. 1 identified three primary users of the external state and local governmental financial reports
Governmental financial information should:
- Demonstrate operations within legal restraints imposed by citizens
- Communicate compliance with laws and regulations related to raising and spending money
- Demonstrate interperiod equity—Current period expenditures financed with current revenues
To demonstrate full accountability for all activities, information must include:
- Cost of services
- Sufficiency of revenues for services provided
- Financial position
The concepts statements encourage Service Efforts and Accomplishment (SEA) reporting
- SEA reporting provides more complete information about a governmental entity’s performance than can be provided by traditional financial statements and schedules.
Funds
Government comprised of funds—Self-balancing sets of accounts—three categories
Methods of Accounting
Funds of a governmental unit use two methods of accounting ...
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