GASB Statement 34, Basic Financial Statements and Management Decisions
Select a local government in your state and review the financial statements and audit report for the county or municipality. The financial statements of the government selected should have at least three funds.
Located in Muscogee County, the city of Columbus, Georgia is the state's third-largest city with over 194,000 residents. The Consolidated Government of Columbus, Georgia recently released its latest Comprehensive Annual Financial Report (CAFR) for the 2011 fiscal year. Among the various funds for which this report records accounting practices are the city's General Fund, Special Revenue Funds, Debt Service Funds, and Capital Projects Funds.
Analyze the method of accounting used for the general fund and all other funds in existence by the government. Evaluate the reasoning for the use of the method of accounting for each of the funds as required by GASB.
According to Figure A-1, Major Features of Columbus Consolidated Government's Government-Wide and Fund Financial Statements, the accrual accounting method is the city's preferred form of accounting, in accordance with the guidelines set forth by the Governmental Accounting Standards Board (GASB). Accrual accounting is used within all of Columbus' citywide bookkeeping because the GASB has issued clear mandates as...
As the CAFR states, "the government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements" (Hodge, 2012). The stated reason for using this accounting method is that "under the accrual basis of accounting, revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows" (Hodge, 2012). Accrual accounting is the preferred form of accounting used by municipal governments because it provides a more accurate representation of a city's financial situation, with the formerly typical practice of transferring one year's debts to the next fiscal year curtailed entirely.
3.) Assess the application and compliance of GASB Statement 34, Basic Financial Statements and Management Decisions and Analysis for State and Local Governments to each of the funds.
According to a Summary of GASB Statement 34, which provides the framework for Basic Financial Statements -- and Management's Discussion and Analysis -- for State and Local Governments, "financial managers also will be in a better position to provide this analysis because for the first time the annual report will also…
Beautifully Fabulous State CARF. The information assists in preparation of statement of net assets. The paper also provides definitions of various components of statement of net assets. Statement of Net Assets According to Governmental Accounting Standards Board (2007), a statement of net assets is similar to a balance sheet. It has both asset section as well as liability section. An asset refers to resources the government employs in its operations. On
This role is in response to clients' demands for a single trustworthy individual or firm to meet all of their financial needs. However, accountants are restricted from providing these services to clients whose financial statements they also prepare." (U.S. Department of Labor, Bureau of Labor Statistics, 2009) 1. Public Accounting The work entitled: "The Reality of the CPA's Role" states that modern CPAs work "behind the scenes as trusted advisors in
The authors also point out that in the hierarchy of the GASB statements, interpretations, technical bulletins and the role of consensus approvals of GASB also need to be seen as the development of future Implementation Guide recommendations for future years as well. In summary, the authors provide an excellent overview of how the hierarchy of GASB statements relate to the Implementation Guides produced. Impact of the article: This specific article
GASB No.34's government financial reporting model: Evidence on its information relevance, published in The Accounting Review. This article looks at a government accounting regulation, GASB No. 34, which requires lower level governments to provide "consolidated, government-wide financial statements.," which of course will require reconciliation between the different entities and the overall government financial statements. The authors examine this regulation from the perspective of its main objective, which is to
According to Fickes, GASB 34 changes traditional government accounting to give the readers of government financial reports a more accurate reading of everything (2002). Private accounting firms do not follow these standards because they are not responsible for being accountable to the taxpayers. Budgeting and Financial Reporting in the Government The government cannot just act as it wishes when it comes to budgeting and financial reporting. For this reason, there is
Some mergers and acquisitions (M&as) did not generate any goodwill because they were accounted for using the pooling-of-interests method. In 1969, Leonard M. Savoie (then Executive Vice President of the AICPA) stated that he expected the then-prevailing accounting pronouncement authority, the Accounting Principles Board (APB), to abolish the pooling of interests method. However, the death-knell for this accounting method was not sounded until 2001 with the issuance of SEAS