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Chapter 2: Fund Accounting

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?.

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Chapter 2: Fund Accounting

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  1. Chapter 2: Fund Accounting Nature of Funds & Account Groups Comprehensive Annual Financial Report Exposure Draft Changes Not-for-Profit Funds and Financial Reports

  2. 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

  3. 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

  4. Governmental Funds • General Fund • Special Revenue Fund • Capital Projects Fund • Debt Service Fund

  5. 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

  6. Proprietary Funds • Enterprise Funds • Internal Service Funds

  7. Fiduciary Funds • Expendable - use modified accrual • Nonexpendable - use full accrual

  8. Fiduciary Funds • Trust Funds • Expendable Trust Funds • Nonexpendable Trust Funds - Endowment • Pension Trust Funds • Agency Funds

  9. Comprehensive Annual Financial Report (CAFR) • Introductory Section • General Purpose Financial Statements • Combined Statements and Notes • Combining Statements and Individual Fund Statements

  10. Exposure Draft Proposed Changes • Fund Perspective - pg. 57 • Entity-Wide Perspective - pg. 58-59

  11. Not-for-Profits (University Ex.) • Funds: • current funds • loan funds • endowment funds • plant funds • unexpended • renewals and replacements • retirement of indebtedness • investment in plant • agency funds

  12. 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

  13. 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

  14. Post Class Assignments • Review and Self-Study • Exercises • 2-2 • 2-3 • 2-4 • 2-5 • City of Nashville - Continuing Problem

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