Government-Wide vs Fund Financial Statements Under GASB
By SimplyCPA · 11 October 2026
On this page (6)
- Two levels: Government-wide statements show the government as a whole; fund statements show individual major funds.
- Government-wide: Economic resources focus, full accrual — includes capital assets and long-term debt. Fiduciary activities are excluded.
- Fund statements: Governmental funds use modified accrual; proprietary and fiduciary funds use full accrual.
- Columns: Government-wide statements split governmental activities, business-type activities and discretely presented component units.
- Reconciliation: Required between governmental fund balances and governmental activities net position — capital assets, long-term debt and deferred revenue are the usual items.
The structure of a government's annual report
Under the GASB reporting model (introduced by Statement No. 34 and updated by Statement No. 103), the basic financial statements are:
- Government-wide statements: statement of net position and statement of activities.
- Fund statements: separate statements for governmental funds, proprietary funds and fiduciary funds.
- Notes to the financial statements.
They're accompanied by management's discussion and analysis (MD&A) and other required supplementary information.
Side by side
| Government-wide | Governmental funds | Proprietary funds | |
|---|---|---|---|
| Measurement focus | Economic resources | Current financial resources | Economic resources |
| Basis of accounting | Accrual | Modified accrual | Accrual |
| Capital assets | Reported and depreciated | Not reported (expenditures) | Reported and depreciated |
| Long-term debt | Reported | Not reported (proceeds are other financing sources) | Reported |
| Equity called | Net position | Fund balance | Net position |
| Fiduciary activities | Excluded | — | — |
The government-wide statements
- Statement of net position — assets + deferred outflows − liabilities − deferred inflows = net position, split into net investment in capital assets, restricted and unrestricted.
- Statement of activities — a net (expense) revenue format. Each function's expenses are shown less its program revenues (charges for services, operating grants, capital grants). General revenues such as taxes are shown at the bottom.
- Columns separate governmental activities (mostly governmental funds plus internal service funds) and business-type activities (enterprise funds), with discretely presented component units alongside.
Major funds
Fund statements present each major fund in its own column and aggregate the rest. The general fund is always major. Another governmental or enterprise fund is major if it meets both a 10% test (of the total for its fund category) and a 5% test (of the combined governmental and enterprise total) on assets plus deferred outflows, liabilities plus deferred inflows, revenues, or expenditures/expenses. A government can also choose to treat any fund as major.
The reconciliation
Because governmental funds and governmental activities use different measurement, the statements must be reconciled. Typical reconciling items from total governmental fund balance to governmental activities net position:
- + Capital assets, net of accumulated depreciation.
- − Long-term liabilities such as bonds, compensated absences and net pension liability.
- + Revenue that was unavailable (deferred) in the funds but earned under accrual.
- +/− Internal service fund net position, which is included in governmental activities.
- − Accrued interest on long-term debt not yet due.
Example: Total governmental fund balance is $5 million. Capital assets (net) are $40 million, general obligation bonds $25 million, and property taxes deferred in the funds $1 million. Governmental activities net position = $5m + $40m − $25m + $1m = $21 million (before any other reconciling items).
See also governmental fund accounting basics and our FAR governmental accounting topic.