Governmental Financial Reporting Standards Flashcards

Which GASB statement introduced the concept of major funds for state and local governments?

Answer: GASB Statement No. 34

GASB Statement No. 34 introduced the concept of major funds, requiring governments to present separate financial statements for each major governmental and enterprise fund.

Under GASB standards, when is a governmental fund considered a 'major fund'?

Answer: When it meets specific quantitative thresholds related to total assets, liabilities, revenues, or expenditures

A fund is major if it meets both a 10% criterion (10% of total for its fund category) and a 5% criterion (5% of aggregate total for both categories combined).

What is the purpose of note disclosures in a government's financial statements?

Answer: To provide detailed information about specific transactions and policies that cannot be found in the statements themselves

Note disclosures provide essential information about accounting policies, significant transactions, and other details necessary for understanding the financial statements.

Which governmental accounting concept requires that resources must be legally or contractually restricted to be reported in a special revenue fund?

Answer: GASB Statement No. 54

GASB Statement No. 54 clarified that special revenue funds should only be used when the primary revenue source is restricted or committed for a specific purpose.

What is 'government-wide' reporting designed to accomplish?

Answer: Show the overall financial position of the government including all long-term assets and liabilities

Government-wide reporting provides a comprehensive economic view, consolidating all governmental and business-type activities to show total assets, liabilities, and net position.

In the context of GASB reporting, what is 'net position'?

Answer: Total assets plus deferred outflows minus total liabilities minus deferred inflows

Net position equals total assets plus deferred outflows of resources minus total liabilities minus deferred inflows of resources, representing the government's equity.