Chapter 2: Fund Accounting

1
Chapter 2 Fund Accounting

• Nature of Funds Account Groups
• Comprehensive Annual Financial Report
• Exposure Draft Changes
• Not-for-Profit Funds and Financial Reports

2
What is a Fund?

• Fiscal and accounting entity with its own
  self-balancing set of accounts from which
  separate financial statements can be generated
• governments use to separate resources that have
  restrictions
• many funds in each government
• assets - liabilities fund balance

3
Governmental Funds

• Use modified accrual basis of accounting
• measurement focus is flow of financial resources
• therefore, in the fund just record inflows and
  outflows of financial resources
• use account groups to keep track of the long-term
  debt and fixed assets

4
Governmental Funds

• General Fund
• Special Revenue Fund
• Capital Projects Fund
• Debt Service Fund

5
Proprietary Funds

• Use full accrual basis of accounting
• measurement focus is flow of economic resources
• therefore, in the fund record all transactions
• all assets all liabilities fund equity
• used for all business-type activities

6
Proprietary Funds

• Enterprise Funds
• Internal Service Funds

7
Fiduciary Funds

• Expendable - use modified accrual
• Nonexpendable - use full accrual

8
Fiduciary Funds

• Trust Funds
• Expendable Trust Funds
• Nonexpendable Trust Funds - Endowment
• Pension Trust Funds
• Agency Funds

9
Comprehensive Annual Financial Report (CAFR)

• Introductory Section
• General Purpose Financial Statements
• Combined Statements and Notes
• Combining Statements and Individual Fund
  Statements

10
Exposure Draft Proposed Changes

• Fund Perspective - pg. 57
• Entity-Wide Perspective - pg. 58-59

11
Not-for-Profits (University Ex.)

• Funds
• current funds
• loan funds
• endowment funds
• plant funds
• unexpended
• renewals and replacements
• retirement of indebtedness
• investment in plant
• agency funds

12
University Financial Statements

• Penn State - governmental university - GASB
  requires fund-based statements
• Case Western Reserve - private university - FASB
  requires reporting on net assets for entire
  entity
• Statement of Financial Position, Statement of
  Activities, Statement of Cash Flows

13
Nashville (CD-ROM)

• write on your CD - Name, telephone
• will also put in labs so that it is available all
  the time
• can print out selected pages
• keep an ongoing log of each weeks answers (short
  paragraphs for each main question)
• groups will do ratio analysis and summary report

14
Post Class Assignments

• Review and Self-Study
• Exercises
• 2-2
• 2-3
• 2-4
• 2-5
• City of Nashville - Continuing Problem