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GASB Statement No. 34 Cliff Notes

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Title: GASB Statement No. 34 Cliff Notes


1
GASB Statement No. 34 Cliff Notes
  • Laurie L. Piccirillo, Business Manager
  • Brockway Area School District
  • Dr. David M. Piper, Assistant to Superintendent
  • Altoona Area School District

2
Key Improvements Resulting from the New
Governmental Financial Reporting Model
Improvements Designed to Enhance Operational
Accountability
Previous Model
New Model
All reporting based on funds and fund types
Introduction of government-wide financial
statements
Information on governmental activities limited to
near-term inflows and outflows of spendable
resources
Government-wide financial statements provide
additional long-term focus for governmental
activities
Cost data provided for both governmental and
business-type activities
Cost data available only for business-type
activities
Narrative overview and analysis required in the
form of Managements Discussion and Analysis
No narrative required
3
Improvements Designed to Enhance Fiscal
Accountability
Previous Model
New Model
Information in basic financial state-ments
presented separately for major individual
governmental and enterprise funds
Information in basic financial statements
aggregated by fund type
Budgetary comparisons associated with the basic
financial statements presented for the general
fund and individual major special revenue funds
Budgetary comparisons associated with the basic
financial statements aggregated by fund type
Budgetary comparisons report only final amended
budget
Budgetary comparisons report both original and
final amended budget
4
Financial Statement Format
  • Managements Discussion and Analysis
  • Government-Wide Financial Statements
  • Fund Financial Statements
  • Notes to the Financial Statements
  • Required Supplementary Information
  • (Other than MDA)

5
Effective Dates
  • Periods beginning after
  • June 15, 2001 for governments with revenues of
    100 million or more (Phase 1)
  • June 15, 2002 for governments with revenues of
    10 million or more but less than 100 million
    (Phase II)
  • June 15, 2003 for governments with revenues of
    less than 10 million (Phase III)
  • Early application is encouraged

6
Basic Financial Statements
  • Government Wide
  • Statements of Net Assets
  • Statements of Activities
  • Fund Financial Statements
  • Governmental Funds
  • Balance Sheet
  • Statement of revenues, expenditures and changes
    in fund balance

7
  • Proprietary Funds
  • Statement of net assets or balance sheet
  • Statement of revenues, expenses and changes in
    fund net assets or fund equity
  • Statement of cash flows
  • Fiduciary Funds
  • Statement of fiduciary net assets
  • Statement of changes in fiduciary net assets

8
  • Fund Statements
  • Governmental (emphasizing major funds)
  • General fund
  • Special revenue funds
  • Capital projects funds
  • Debt service funds
  • Permanent funds (legally restricted earnings
    only benefit government or its citizenry)
  • Proprietary funds
  • Enterprise funds (emphasizing major funds)
  • Internal service funds

9
  • Fund Statements
  • Fiduciary funds
  • Pension trust funds
  • Investment trust funds
  • Private purpose trust funds which are trust
    arrangements under which principal or interest
    benefit specific individuals, private
    organizations and other governments
  • Agency funds that are limited to net assets held
    for a specific other person or entities

10
  • Fund Statements
  • Fund statements presentation
  • Major funds
  • Non-major funds presented in a single column by
    category
  • Concept of major and non-major funds does not
    apply to fiduciary funds and internal service
    funds
  • Major funds criteria
  • General fund always major
  • Individual fund is major if
  • At least 10 percent of assets, liabilities,
    revenues or expenditures / expenses (excluding
    extraordinary items) of the relevant fund
    category of fund type

11
  • Fund Statements
  • Major funds criteria (contd)
  • Individual fund is major if
  • At least 5 percent of total governmental and
    proprietary funds combined
  • Other funds that are important
  • PDE considerations

12
Major Fund Determination Worksheet
13
  • Fund Statements
  • Governmental fund statements
  • Balance sheet
  • Statement of revenues, expenditures and changes
    in fund balances
  • Reconciliation required for both statements
  • Current financial resources
  • Modified accrual basis

14
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15
Reconciliation of the Governmental Funds Balance
Sheet to Statement of Net Assets
16
OWEN J. ROBERTS SCHOOL DISTRICTBALANCE
SHEETGOVERNMENTAL FUNDSAS OF JUNE 30, 2002
17
OWEN J. ROBERTS SCHOOL DISTRICTRECONCILIATION OF
THE GOVERNMENTAL FUNDS BALANCE SHEET TO THE
STATEMENT OF NET ASSETSAS OF JUNE 30, 2002
18
Statement of Revenues, Expenditures and Changes
in Fund BalancesGovernmental FundsFor the Year
Ended June 30, 20XX
19
Reconciliation of the Governmental
FundsStatement of Revenues, Expenditures and
Changes in Fund BalanceTo the Statement of
Activities
20
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF
REVENUES, EXPENDITURES, AND CHANGES IN FUND
BALANCESGOVERNMENTAL FUNDSFOR THE YEAR ENDED
JUNE 30, 2002
21
OWEN J. ROBERTS SCHOOL DISTRICTRECONCILIATION OF
THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES,
EXPENDITURES,AND CHANGES IN FUND BALANCE TO THE
STATEMENT OF ACTIVITIESFOR THE YEAR ENDED JUNE
30, 2002
22
  • Fund Statements
  • Proprietary fund statements
  • Economic resources
  • Accrual basis
  • Enterprise redefined debt / user charge based
  • Debt secured solely by pledge of net revenues
    from fees or charges
  • Laws or regulations require recovery of costs
  • Pricing policy designed to recover cost

23
  • Fund Statements
  • Proprietary fund statements (contd)
  • Statement of net assets / balance sheet
  • Classified
  • Restricted assets should be reported
  • Fund net assets / equity has three
    classifications that replace contributed capital
    and retained earnings
  • Invested for capital assets net of related debt
  • Restricted
  • Unrestricted

24
  • Fund Statements
  • Proprietary fund statements (contd)
  • Statement of revenues, expenses and changes in
    fund net assets / equity
  • Distinguish between operating and non-operating
  • Capital contributions and transfers reported
    separately
  • Statement of Cash Flows
  • Four categories of cash flows
  • Operating
  • Non-capital financing
  • Capital and related financing
  • Investing
  • Direct method required for operating activities

25
Statement of Net AssetsProprietary FundsJune
30, 20_ _
26
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF NET
ASSETSPROPRIETARY FUNDAS OF JUNE 30, 2002
27
Statement of Revenues, Expenses and Changes in
Fund Net AssetsProprietary FundsJune 30, 20XX
28
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF
REVENUES, EXPENSES, AND CHANGES IN FUND NET
ASSETSPROPRIETARY FUNDFOR THE YEAR ENDED JUNE
30, 2002
29
Combined Statement of Cash FlowsProprietary Fund
TypesJune 30, 20XX
30
Combined Statement of Cash Flows For the Fiscal
Year Ending June 30, 20XXSchedule of Noncash
Investing, Capital and Financing
31
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF CASH
FLOWSPROPRIETARY FUNDAS OF JUNE 30, 2002
32
  • Fund Statements
  • Fiduciary fund statements
  • Statement of fiduciary net assets
  • Statement of changes in fiduciary net assets
  • Redefined cannot be used to support the
    governments own programs
  • Economic resources
  • Accrual basis

33
Statement of Net AssetsFiduciary FundsJune 30,
20XX
34
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF NET
ASSETSFIDUCIARY FUNDSAS OF JUNE 30, 2002
35
Statement of Changes in Net AssetsFiduciary
Funds
36
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF
CHANGES IN NET ASSETSFIDUCIARY FUNDFOR THE YEAR
ENDED JUNE 30, 2002
37
Government Wide Statements
  • Government-wide Government and business type
    activities presented for primary government.
    Nonblended component units retain a discrete
    presentation.
  • Economic resource
  • Accrual basis
  • Fiduciary funds not reported

38
  • Government Wide Statements
  • Statement of net assets
  • Assets less liabilities net assets is
    encouraged
  • Traditional balance sheet format allowed (Assets
    Liabilities Net Assets)
  • Assets and liabilities in order of liquidity

39
Government Wide Statements
  • Statement of net assets
  • Liabilities that are long-term should be current
    and long-term
  • Classified balance sheet can be presented
  • Net assets three categories
  • Capital
  • Restricted
  • Unrestricted
  • Infrastructure assets included

40
Statement of Net Assets
  • Elimination and Reclassification
  • Balances between funds that are initially
    recorded as interfund receivables and payables at
    individual fund level should be eliminated for
    governmental and business-type activities
  • Eliminate the grossing up of assets and
    liabilities
  • Interfund receivables / payables between general
    fund special revenue and other governmental
    funds eliminated and same with interfund
    receivables/payables between proprietary funds
  • Net residual interfund receivables / payables not
    eliminated and labeled internal balances

41
Statement of Net Assets
  • Interfund receivables / payables between primary
    government and fiduciary funds not eliminated and
    reported as receivables from / payable to
    external parties

42
Statement of Net AssetsJune 30, 20_ _
43
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF NET
ASSETSAS OF JUNE 30, 2002
44
Government Wide Statements
  • Statement of Activities
  • Net cost format
  • Expenses by function / programs
  • Direct expenses required
  • Indirect expense allocation permitted separate
    column for indirect expenses, if allocated
  • Depreciation
  • Interest
  • Special, extraordinary items and transfers

45
  • Basic Financial Statements
  • Statement of Activities
  • Program revenues reduce the cost of a program
  • Charges for services
  • Operating grants and contributions
  • Capital grants and contributions
  • Net cost is financed by general revenues

46
  • Statement of Activities
  • Eliminations and Reclassifications
  • Internal activities should be eliminated so that
    expenses and revenues are recorded only once
  • The general fund may charge other funds for
    services such as insurance coverage on an
    internal basis. When these costs are
    consolidated the doubling up should be
    eliminated so that the allocated expenses are
    reported only by the function to which they are
    allocated.
  • Internal activities should not be eliminated when
    classified as interfund services provided or
    used. Example, sale of water, electricity from
    utility to general government.

47
  • Statement of Activities
  • Intra-entity activity Transaction between
    primary government and its discretely presented
    component units
  • Should not be eliminated
  • Amount payable / receivable should be reported as
    a separate line item
  • Internal service fund activity should be
    eliminated to avoid doubling up of expenses and
    revenue.
  • Any profit (loss) should be allocated pro rata to
    the participating funds
  • Residual balances related to assets and
    liabilities reported in governmental activities
    in statements of net assets.

48
Statement of Activities
49
OWEN J. ROBERTS SCHOOL DISTRICTSTATEMENT OF
ACTIVITIESFOR THE YEAR ENDED JUNE 30, 2002
50
  • Basic Financial Statements
  • Four types of revenue sources
  • Type A Those who purchase, use or directly
    benefit from the goods or services of the program
    (always program revenue)
  • Type B Parties outside the reporting
    governments citizenry (program revenue if
    restricted)
  • Type C The reporting governments taxpayers
    all taxpayers, regardless whether they benefit
    from a particular program. (always General
    Revenue)
  • Type D The governmental institution itself
    (usually General Revenue)

51
General vs Program Revenue Pocket Guide
52
  • Component Unit Presentation
  • Discrete presentation in government wide
    statements
  • Fiduciary component units
  • Major component unit reporting
  • Separate columns in government wide statements
  • Separate statements after fund presentation
  • Condensed information in notes.

53
  • Required Supplementary Information
  • Budgetary comparisons for general and major
    special revenue funds
  • Original and final budget
  • Actual on budgetary basis
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