Governmental Accounting

Model (Governmental Accounting Standards Board (GASB))

• Government-wide: economic resources, full accrual; excludes fiduciary funds.
• Governmental funds: current financial resources, modified accrual.
• Proprietary and fiduciary funds: full accrual. Proprietary cash flows: direct method.

11 funds

Governmental: General, Special revenue, Capital projects, Debt service, Permanent. Proprietary: Enterprise, Internal service. Fiduciary: Pension trust, Investment trust, Private-purpose trust, Custodial.

Modified accrual

• Revenue: measurable + available (property taxes: collected within 60 days).
• Debt principal and interest: expenditure when due.
• Capital outlay = expenditure; bond proceeds = other financing source.

Budgets

Encumbrance on purchase order; reversed when goods arrive. Budgetary comparison = required supplementary information (RSI).

Fund balance

Nonspendable · Restricted · Committed · Assigned · Unassigned (positive only in the General Fund).

Net position

Net investment in capital assets · Restricted · Unrestricted.

Exam traps

• Governmental fund statements don't report capital assets or long-term debt — those appear only in the government-wide statements.
• Interfund transfers are other financing sources and uses; interfund services provided and used (such as charges from an internal service fund) are revenues and expenditures.
• Encumbrances are neither expenditures nor liabilities. Amounts outstanding at year end sit within restricted, committed or assigned fund balance — there's no separate "reserved" line.