Governmental Financial Reporting Standards Flashcards

Which body establishes generally accepted accounting principles (GAAP) for state and local governments in the United States?

Answer: GASB

The Governmental Accounting Standards Board (GASB) establishes GAAP for state and local governments.

What is the primary financial reporting document required for state and local governments under GASB Statement No. 34?

Answer: Comprehensive Annual Financial Report

GASB Statement No. 34 requires state and local governments to produce a Comprehensive Annual Financial Report (CAFR), now called the Annual Comprehensive Financial Report (ACFR).

Under GASB standards, which basis of accounting is used for governmental funds?

Answer: Modified accrual basis

Governmental funds use the modified accrual basis of accounting, recognizing revenues when measurable and available and expenditures when the liability is incurred.

Which GASB concept requires governments to report infrastructure assets in their government-wide financial statements?

Answer: GASB Statement No. 34

GASB Statement No. 34 introduced the requirement to report infrastructure assets at historical cost, net of accumulated depreciation, in government-wide statements.

What does the Management's Discussion and Analysis (MD&A) section of a government's financial report provide?

Answer: An analytical overview of the government's financial activities

The MD&A provides management's analytical overview of the government's financial activities based on currently known facts, decisions, or conditions.

Under GASB Statement No. 34, government-wide financial statements are presented using which basis of accounting?

Answer: Full accrual

Government-wide financial statements use the full accrual basis of accounting to present a comprehensive economic view of the government's financial position.