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Wiley GAAP for Governments 2013: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments by Warren Ruppel

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CHAPTER 7

PROPRIETARY FUNDS

Introduction

Basis of Accounting and Measurement Focus for Proprietary Funds

New Accounting Requirements under GASBS 62

Effective Date

Enterprise Funds

Background and Uses

Specific Accounting Issues

Restricted assets

Debt

Contributed capital

Refundings of debt

Tap fees

Customer and developer deposits

Regulated industries

Fixed assets—Infrastructure and contribution of general fixed assets

Internal Service Funds

Background and Uses

Specific Accounting Issues

Duplications of revenues and expenses

Surpluses and deficits

Risk financing activities

Summary

INTRODUCTION

Proprietary funds are used to account for a government’s ongoing organizations and activities that are similar to those found in the private sector. In other words, these activities resemble commercial activities performed by governments, and the basis of accounting and measurement focus of these funds reflect this resemblance. There are two types of proprietary funds—enterprise funds and internal service funds.

This chapter describes the basic characteristics and accounting for proprietary funds, both enterprise and internal service funds. The following specific topics are addressed:

  • Basis of accounting and measurement focus for proprietary funds
  • Enterprise funds
— Background and uses
— Specific accounting issues
- Restricted assets
- Debt
- Contributed capital
- Advance refundings of debt
- Tap fees
- Regulated industries
- Fixed assets—Infrastructure and contributions of general fixed ...

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