Governmental Financial Reporting

Governmental Financial
Reporting
Presented by
David R. Koeppen, Ph.D., CPA
Department of Accountancy
Boise State University [e-mail] Topics
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Introduction
Reporting Basics
Fund Accounting
Government-wide Financial Statements
Summary and Conclusion

Introduction
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Purpose of Financial Reporting
Generally Accepted Accounting Principles
Characteristics of Governmental Entities
Effects of Characteristics on Financial
Reporting

Purpose of Financial Reporting
• Private sector
– For-profit entities—provide information for making investment and credit decisions
– Not-for-profit entities—provide information for making resource allocation decisions

Purpose of Financial Reporting
• Public sector—governmental entities
– Provide information to assess accountability
• Fiscal accountability
– Complied with the budget and implicit legal and managerial restrictions
– Short-term focus; implies that we need to separate total resources into individual funds

• Operational accountability
– Efficient and effective use of resources
– Ability to continue to provide services
– Longer-term focus; implies need for information regarding the overall governmental entity

Generally Accepted Accounting
Principles
• What are they?
• Where do they come from?
– Private for-profit and not-for-profit entities
• Financial Accounting Standards Board

– State and local governments
• Governmental Accounting Standards Board

– Federal government
• Federal Accounting Standards Advisory Board

Characteristics of Governmental
Entities
• Exist for a purpose other than to make a profit • No ownership interests
• Resource providers don’t expect a proportionate benefit

Effects of Characteristics on
Financial Reporting
• Business—ability to provide a return
– Performance (measured by net income)
– Budget = a financial plan

• Government—ability to provide a service
– Performance (measured by services provided and compliance with legal requirements)
– Budget = establishes