Chapter 2: Fund Accounting
Nature of Funds & Account Groups
Comprehensive Annual Financial Report
Exposure Draft Changes
Not-for-Profit Funds and Financial Reports
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
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
Governmental Funds
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General Fund
Special Revenue Fund
Capital Projects Fund
Debt Service Fund
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
Proprietary Funds
• Enterprise Funds
• Internal Service Funds
Fiduciary Funds
• Expendable - use modified accrual
• Nonexpendable - use full accrual
Fiduciary Funds
• Trust Funds
– Expendable Trust Funds
– Nonexpendable Trust Funds - Endowment
– Pension Trust Funds
• Agency Funds
Comprehensive Annual Financial
Report (CAFR)
• Introductory Section
• General Purpose Financial Statements
– Combined Statements and Notes
• Combining Statements and Individual Fund
Statements
Exposure Draft Proposed Changes
• Fund Perspective - pg. 57
• Entity-Wide Perspective - pg. 58-59
Not-for-Profits (University Ex.)
• Funds:
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current funds
loan funds
endowment funds
plant funds
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unexpended
renewals and replacements
retirement of indebtedness
investment in plant
– agency funds
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
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
Post Class Assignments
• Review and Self-Study
• Exercises
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2-2
2-3
2-4
2-5
• City of Nashville - Continuing Problem