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Governmental Financial Statement Analysis

Governmental Financial Statement Analysis. Who uses S & L Government financial statements? Citizen Groups Legislative oversight officials Investors and Creditors The Public Finance Market Primary (Original Issues) Secondary (Existing issues).

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Governmental Financial Statement Analysis

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  1. Governmental Financial Statement Analysis • Who uses S & L Government financial statements? • Citizen Groups • Legislative oversight officials • Investors and Creditors • The Public Finance Market • Primary (Original Issues) • Secondary (Existing issues)

  2. Financial Statement AnalysisState and Local Governments • Net Debt Per Capita: LTD/population • LTD is adjusted by amount available • Net Debt Per Fair Value of Property • LTD/Fair Value of Property • Interest Coverage: Enterprise Funds • Operating Income/Interest Charges • Debt Service/Total Revenues • Debt Service Exp/Total Revenues

  3. Accounting for Special Purpose Government Entities • General Purpose Governments • State and local governments that provide multiple services • Follow accounting as we have studied Chapters 2-8 • Special Purpose Governments • Limited, sometimes one type of service • Fire protection, Library, Public Schools

  4. Accounting Blips-Special Purpose Funds • Categories as to activities • Single governmental activity • Combined G-W and Fund Financial Statements • More than one governmental activity • GASB 34 to include G-W and Fund Statements • Both governmental and business-type activities • GASB 34 and 35; G-W and Fund Statements • Only business-type activities (GASB 34-35) • Only Fiduciary Activities (GASB 34)

  5. Public Colleges and Universities • Pre-GASB 35 • AICPA Model or S & L Government Model • GASB 35 amends GASB 34 to include Public Colleges and Universities in S & L Government category • Same implementation dates • Reporting Categories • Only governmental activities • Both governmental and business-type • Only business-type activities

  6. Accounting Notes-Public C & U • Most will probably report as entities engaged only in business-type activities • Accrual basis of accounting and economic resources measurement focus • Net Assets • Invested in Capital Assets, net of related debt • Restricted (Expendable and Nonexpendable) • Unrestricted • Capital assets and Infrastructure reported same as GASB 34 • Foundations are often set up to manage restricted assets

  7. Public C and U Continued • Tuition discounts and scholarships for which no work is performed reported as revenue reductions • Statement of Net Assets broken down into current and non-current assets and liabilities similar to FP business • Operating Income is distinctively displayed on Statement of R, E, and Changes in Net Assets • Non-operating revenue includes State appropriations, Gifts, and Investment Income • Cash Flow Statement is similar to B-T GASB 34

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