Not-For-Profit Organizations

Governmental

State and Local
Government






City of Martin
County of Weakley
State of Tennessee
Special School Districts
Madison County Hospital
Federal Government

U.S. Government and its
agencies

Non-Governmental






United Way
American Red Cross
Bethel College
Vanderbilt University
Methodist Healthcare
Habitat for Humanity
Definition of a Government




Popular election or appointment by
popular elected officials
Potential for unilateral dissolution by
government
Power to tax
Power of Issuance of tax exempt debt
directly
Financial Reporting-NFPs
Governmental


State and Local
 Objectives
 GAAP Hierarchy (pp. 4-5)
 GASB is King (Queen)
Federal
 Objectives
 GAAP Hierarchy (pp. 4-5)
 FASAB is King (Queen)

Non-Governmental




Objectives (p. 6)
GAAP Hierarchy (pp. 4-5)
FASB is King (Queen)
Recent FASB Activity


Little until middle 1990s
SFAS 116, 117, 118, 121
changed this inactivity
State and Local Government

Financial Reporting





User considerations are much more diverse
Investors and creditors
Legislative and oversight officials
Political and social decisions as well as economic
Measurement Focus


Economic resources
Flow of current financial resources
State and Local Government

Basis of Accounting



Accrual
Modified Accrual
Method of Reporting


Comprehensive Annual Financial Report
Sections of CAFR



Introductory
Financial
Statistical
Exchange and Non-exchange
Transactions

Exchange



Each party receives and gives up equal
values
City cleans up privately owned property
and bills the owner for the service
Non-Exchange


One party does not receive proportionate
value for value given up
Property tax revenue
Financial Statements

Government-Wide





Accrual basis of accounting
Economic resources measurement focus
Statement of Net Assets
Statement of Activities
Fund: A fiscal and accounting entity



Modified accrual basis of accounting
Flow of current financial resources
measurement focus
Each fund is a self-balancing set of accounts
Fund Financial Statements

Governmental Funds



Balance Sheet
Statement of Revenue, Expenditures, and
Changes in Fund Balances
Proprietary Funds



Statement of Net Assets
Statement of Revenue, Expenses, and Changes
in Fund Net Assets
Statement of Cash Flows
Fund Financial Statements

Fiduciary Funds



Statement of Fiduciary Net Assets
Statement of Changes in Net Fiduciary Assets
Special Considerations


Differences in measurement focus and basis of
accounting between Government-Wide and
Fund Financial Statements require reconciliation
schedules
Fiduciary Fund Statements are not included in
the Government-Wide financial statements
Types of Governmental Funds

Governmental





General
Special Revenue
Capital Projects
Debt Service
Permanent

Proprietary Funds



Enterprise
Internal Service
Fiduciary Funds
Agency
 Pension Trust
 Investment Trust
 Private-Purpose
Trust

Governmental Funds and Budgeting





Required for governmental type funds
Optional for proprietary type funds
Adopted by the legislative body
Entered into the accounting records in
reverse debit/credit approach
A part of appropriate financial statements
and/or schedules
Accounting for Capital Assets
and Infrastructure




Long-lived assets
All (except collections of works of art and
historical treasures) must be capitalized and
depreciated on government-wide and
proprietary fund financial statements
Capital assets and related depreciation
expense do not appear on governmental
type fund financial statements
More elaborate discussion in next chapter
Long-Term Debt



Payable more than one year from Statement
of Net Assets Date
All entity long-term debt must be reported
on the Statement of Net Assets (GW)
Governmental type funds do not report
long-term debt on financial statements
(Flow of current financial resources
measurement focus)