How to implement GASB statement no. 34: prepare for the largest innovation ever in state and local government financial reporting.Outside the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). , changes don't don't 1. Contraction of do not. 2. Nonstandard Contraction of does not. n. A statement of what should not be done: a list of the dos and don'ts. come much bigger than this' New financial reporting requirements from the Governmental Accounting Standards Board The Governmental Accounting Standards Board (GASB) is currently the source of generally accepted accounting principles (GAAP) used by State and Local governments in the United States of America. (GASB GASB Governmental Accounting Standards Board ) mean state and local governments must revamp re·vamp tr.v. re·vamped, re·vamp·ing, re·vamps 1. To patch up or restore; renovate. 2. To revise or reconstruct (a manuscript, for example). 3. To vamp (a shoe) anew. n. both the form and substance of their financial reports. The new model requires government-wide statements containing information--not previously collected--that will make it easier for financial statement users to measure operational accountability The traceability of actions performed on a system to a specific system entity (user, process, device). For example, the use of unique user identification and authentication supports accountability; the use of shared user IDs and passwords destroys accountability. by accounting for activities as business enterprises do. In the statement of activities, for example, governments will have to capitalize--not expense--the purchase of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → . In addition, the financial statements' format will reflect the net cost of government services, such as providing for public safety and education. For the tens of thousands of governments that have to comply with GASB Statement no. 34, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments--and for the auditors AUDITORS, practice. Persons lawfully appointed to examine and digest accounts referred to them, take down the evidence in writing, which may be lawfully offered in relation to such accounts, and prepare materials on which a decree or judgment may be made; and to report the whole, together helping them interpret and implement it--this is a major undertaking. (Statement no. 34 was issued in June June: see month. 1999. See JofA, Official Releases, Oct. 99, page 112.) When they have implemented the statement, however, these governments' financial reports will provide more data than ever before, much of it in new government-wide formats. The required implementation date for larger governments is for fiscal years beginning after June 15, 2001 (see "GASB 34 Implementation Schedule" page 72). The city of Alexandria, Virginia Alexandria is an independent city in the Commonwealth of Virginia. As of the 2000 census, the city had a total population of 128,284. Located along the Western bank of the Potomac River, Alexandria is approximately 6 miles (9.6 kilometers) south of downtown Washington, DC. , however, decided to implement two years early. Its financial statements are presented in exhibit 1, "Statement of Net Assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. ," page 77, and exhibit 2, "Statement of Activities," page 78. This article offers suggestions and advice on how to implement the new statement. It recounts Alexandria's experience and discusses possible concerns from the viewpoint of the state of Alaska--which expects to implement the standard in 2002--and of an Oklahoma City Oklahoma City (1990 pop. 444,719), state capital, and seat of Oklahoma co., central Okla., on the North Canadian River; inc. 1890. The state's largest city, it is an important livestock market, a wholesale, distribution, industrial, and financial center, and a farm CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. firm that audits the financial statements of state and local governments and is assisting a number of them in preparing their financial reports under Statement no. 34. To help governments implement Statement no. 34, GASB issued Statement no. 37, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments: Omnibus omnibus: see bus. , and Statement no. 38, Certain Financial Statement Note Disclosures in June 2001 (see Official Releases, page 127). Governments should review the following related statements as well: * Statement no. 36, Recipient Reporting for Certain Shared Nonexchange Revenues (April 2000). * Statement no. 35, Basic Financial Statements--and Management's Discussion and Analysis--for Public Colleges and Universities (November November: see month. 1999). * Statement no. 33, Accounting and Financial Reporting for Nonexchange Transactions (December December: see month. 1998). GET A GOOD START Governments need to quickly identify issues that could hinder hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. a smooth implementation of the requirements. One determination they should make early is whether they have enough skilled staff or will need outside assistance in preparing their financial statements, says Frank Crawford Frank Crawford was a college football coach at Michigan, Wisconsin, Nebraska, and Texas. In 1891, he (with Mike Murphy) coached the Michigan team to a 4-5 record; this was the first year the Michigan team had coaches. In 1892, he coached at Wisconsin, and compiled a 4-3 record. , CPA, a partner in the Oklahoma City auditing firm of Crawford & Associates. Those beginning to plan for implementation will be glad to hear the statement's provisions won't won't Contraction of will not. won't will not won't will have much impact on accounting software systems. "The effect is minimal," Crawford says. "Governments still will maintain their fund accounting and do adjustments at yearend to convert to the external financial reporting requirements of Statement no. 34." But there are other areas to be concerned about. Kim Kim orphan wanders streets of India with lama. [Br. Lit.: Kim] See : Adventurousness Garnero, CPA, director of the division of finance in Alaska's department of administration, says her top concern is staffing. "We don't have people to dedicate ded·i·cate tr.v. ded·i·cat·ed, ded·i·cat·ing, ded·i·cates 1. To set apart for a deity or for religious purposes; consecrate. 2. to this," she says, "and staff turnover is a constant worry. So, we've we've Contraction of we have. we've have been training with a consultant who reviewed our previous financial statements and designed an implementation plan that focused on those statement provisions that pertain to pertain to verb relate to, concern, refer to, regard, be part of, belong to, apply to, bear on, befit, be relevant to, be appropriate to, appertain to us." For example, Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States doesn't does·n't Contraction of does not. have any general obligation debt, so the consultant made sure Garnero and her staff didn't did·n't Contraction of did not. didn't did not didn't do waste time on that aspect of the statement or any other areas that didn't concern them. KEY IMPLEMENTATION TASKS While retaining much of the earlier fund-based reporting model, Statement no. 34 adds a new set of government-wide statements that provide a comprehensive overview of government finances, measured on an accrual basis A method of accounting that reflects expenses incurred and income earned for Income Tax purposes for any one year. Taxpayers who use the accrual method must include in their taxable income any money that they have the right to receive as payment for services, once it . Creating such statements is a big challenge for governments, but they can meet it by breaking implementation tasks into smaller components. This is especially true for government activity: Existing funds information must be converted to the government-wide format, using the accrual basis of accounting. A government can do this by setting up a spreadsheet spreadsheet Computer software that allows the user to enter columns and rows of numbers in a ledgerlike format. Any cell of the ledger may contain either data or a formula that describes the value that should be inserted therein based on the values in other cells. that presents all the data elements pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. to such funds, calculating and displaying their sum in a totals column, and then inserting in·sert tr.v. in·sert·ed, in·sert·ing, in·serts 1. To put or set into, between, or among: inserted the key in the lock. See Synonyms at introduce. 2. additional data on capital assets capital assets n. equipment, property, and funds owned by a business. (See: capital, capital account) , long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and other items that make it possible to convert the spreadsheet data to the accrual basis. (Paragraphs 62, 67 and 104 of the statement provide additional information on this topic.) Another important task for governments is capturing cost information about their roads, bridges, sidewalks and other infrastructure assets. They must begin reporting infrastructure when they implement Statement no. 34 but have up to four years to capture cost information on previously acquired infrastructure assets. If records are unavailable, governments need only estimate the cost of major infrastructure assets acquired since 1980. To determine what information is available, they could meet with the public works department Many governments worldwide have had departments or ministries referred to as the Public Works Department either formally or informally. In Australia: - New South Wales -
INFORMATION NEEDS Implementors must determine what adjustments are needed to convert existing fund-based information to the accrual basis in government-wide statements. These adjustments mostly relate to capital assets, long-term debt, internal balances and activities and certain revenue items. (For details, see "GASB 34 Implementation Checklist," page 73). Capital assets. To make the conversion, it's it's 1. Contraction of it is. 2. Contraction of it has. See Usage Note at its. it's it is or it has it's be ~have essential to determine early whether a government's capital asset system can provide the necessary information and, if not, what additional steps are required to capture it. Fortunately for Alexandria Alexandria, city, Egypt Alexandria, Arabic Al Iskandariyah, city (1996 pop. 3,328,196), N Egypt, on the Mediterranean Sea. It is at the western extremity of the Nile River delta, situated on a narrow isthmus between the sea and Lake Mareotis (Maryut). , its existing asset management system had provided the information needed for the conversion. Also, the city had raised its capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. threshold The point at which a signal (voltage, current, etc.) is perceived as valid. to $5,000 from $1,000, which substantially reduced the number of items to be tracked. As part of the implementation process, therefore, it's worthwhile for governments to review their capitalization policy. Long-term debt. Activity related to long-term debt also plays a major role in the conversion process. Most information about the nature of debt is readily available in current financial statements. However, governments may have to develop new information about accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. and the change in noncapital liabilities (such as compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. absences and claims and judgments) related to their operations by functional area, as was the case for Alexandria. Because Alexandria had previously adopted a policy to set aside fund balances to cover a portion of the compensated absence liabilities, the impact of these liabilities on unrestricted net assets was minimal. But for many governments, this will not be true. Therefore, all governments should review their policy. Internal balances and activities. Often internal service funds provide goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. on a cost reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. basis, primarily to the general government. If this is the case, such funds should be reported as part of government activities in the financial statements. Otherwise, they should be reported as part of "business-type" activities. Governments should eliminate interfund receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed and payables Payables Related: Accounts payable and items for the "doubling-up" effect of internal service fund activities. In essence, any income or losses that are related to an internal service funds activity represent an adjustment to the expenses recorded by the functions (for example, general government, which contains several departments) that purchased the goods or services. Alexandria had only one internal service fund, and its activity was concentrated in just a few departments, so it wasn't was·n't Contraction of was not. wasn't was not wasn't be hard to determine functional costs to allocate To reserve a resource such as memory or disk. See memory allocation. to the fund's income, but governments with several internal service funds may find it more difficult. Certain revenue items. GASB Statement no. 33, Accounting and Financial Reporting for Nonexchange Transactions, provides guidance on revenue recognition--on both the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. and modified accrual bases--for most taxes, grants and private donations. When governments make a conversion, they must adjust the revenue for nonexchange transactions from the modified accrual basis to the accrual basis. The statement is effective for financial statements for periods beginning after June 15, 2000, but governments must adopt it earlier if they implement Statement no. 34 before then. Implementing Statement no. 33 was somewhat challenging for Alexandria. Because the city collects one calendar year's property taxes in two different fiscal years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time conclusions it reached on how to record them were the subject of many late-night late-night also late night adj. 1. Occurring late at night: a late-night television show. 2. Open late at night: a late-night diner. discussions with its auditors. Together, they reviewed taxpayers' rights to refunds and city policies related to collection procedures. If regulations do not adequately specify how taxes are to be used, implementation could have some unintended revenue recognition consequences. Governments should review the impact of the statement with their auditors as early as possible. Auditors see very clearly what happens, Crawford explains, when governments underestimate the importance of Statement no. 33 in relation to their implementation of Statement no. 34. The 40 to 50 government entities that implemented Statement no. 34 for June 30, 2000, he says, had to implement Statement no. 33 as well. But, many of those governments are now saying they "underestimated the impact of Statement no. 33." For example, governments misunderstood mis·un·der·stood v. Past tense and past participle of misunderstand. adj. 1. Incorrectly understood or interpreted. 2. the manner in which the statement requires them to recognize receivables, revenues and deferred revenue related to property and sales taxes sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. , grants and other contributions. Another task government accountants and the CPA firms assisting them face in the conversion is identifying program revenue, which reduces the net cost of the functions of governments to be financed from general revenue. In order to properly report program revenue in the statement of activities, governments must identify it by functional area, which can be a time-consuming time-con·sum·ing adj. Taking up much time. time-consuming Adjective taking up a great deal of time Adj. 1. task. This process does not affect the amount of revenue reported, but allows measurement of the net cost of government functions. OTHER ISSUES Statement no. 34 contains several areas that allow for alternatives in displaying information, so governments should consider the options available and determine which display method is most appropriate for their users. Alexandria's approach to early implementation of the statement was to keep the reporting format as simple as possible in the initial implementation and, based on users' reactions, consider alternative formats in the future. The government-wide statements will contain new information about finances. An important final step in implementing Statement no. 34 is explaining these data to financial statement users. Government officials, the governing board Noun 1. governing board - a board that manages the affairs of an institution board - a committee having supervisory powers; "the board has seven members" and other parties interested in a government's finances all need to understand the new reporting model. Governments therefore should develop adequate plans for meeting this educational need. Alexandria began informing its city leaders, budget staff, technology staff and citizens about Statement no. 34 long before implementing it. As a result, questions were minimal when the implementation took place. Nevertheless, the city expects financial report users will need ongoing help to find information that may have been elsewhere under the old reporting model. A HISTORIC CHANGE This implementation effort will be the most challenging that many governments face. At times they may find the process overwhelming. But governments that proceed carefully, identifying required information and determining how to obtain or calculate it, will find that implementing Statement no. 34 is a manageable task with great rewards. For the government of Alexandria, the implementation of GASB Statement no. 34 was not as difficult as they had feared. Their overall advice is to get started as soon as possible and to keep implementation goals simple. They also recommend reading Statement no. 33 more than once. One of the most useful things they did was to set up a spreadsheet early and address each of the major adjustments to the accrual basis individually. Their worst problem was dealing with issues related to GASB Statement no. 33 late in the process and underestimating the time needed to meet the required note disclosures. In future years, however, this problem should not recur. "Government-wide statements are something no one's ever seen before," Garnero says. "This definitely will help people understand their government's finances better." Alexandria Facts and Figures Located just across the Potomac River Potomac River River, east-central U.S. Rising in the Appalachian Mountains of West Virginia, it is about 287 mi (462 km) long. It flows southeast through the District of Columbia into Chesapeake Bay. It is navigable by large vessels to Washington, D.C. from Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C., Alexandria is an independent municipality MUNICIPALITY. The body of officers, taken collectively, belonging to a city, who are appointed to manage its affairs and defend its interests. with a population of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 125,000 and general fund revenues of more than $300 million. It also is one of America's most historic cities--George Washington was one of its first trustees. Its financial reporting staff consists of six accountants.
GASB 34 Implementation Schedule
Total revenues for Implementation required
government and for fiscal years
enterprise funds beginning after
More than $100 million June 15, 2001
$10 million to $100 million June 15, 2002
Less than $10 million June 15, 2003
Exhibit 1: Statement of Net Assets
City of Alexandria, Virginia
June 30, 2000
Primary government
Governmental Business-type
activities activities
Assets
Cash and cash equivalents $ 84,931,759 $ 1,256,761
Cash and investments with 1,456,175 --
fiscal agents
Current portion of 189,538,846 269,107
receivables (net)
Accrued interest 390,213 --
Due from component units 11,230,834 --
Due from other governments 23,815,220 --
Inventory of supplies 1,288,791 3,416
Prepaid and other assets 377,749 --
Long-term portion of notes 1,356,370 --
receivable
Capital assets
Land and construction 59,322,329 --
in progress
Other capital assets, net 174,778,628 171,570
Capital assets, net $234,100,957 $ 171,507
Total assets $548,486,914 $ 1,700,854
Liabilities
Accounts payable $ 10,612,163 $ 9,131
Matured coupons payable 61,923 --
Accrued liabilities 3,834,406 7,031
Deferred revenue 131,495,564 --
Due to primary government -- --
Other short-term liabilities 2,158,691 40,607
Deposits 2,527,299 --
Long-term liabilities due 8,208,617 --
within one year
Long-term liabilities due in 122,716,661 --
more than one year
Total liabilities $281,615,324 $ 56,769
Net Assets
Invested in capital assets, $172,590,199 $ 171,570
net of related debt
Restricted for:
Capital projects 39,192,685 --
Unrestricted assets 55,088,706 1,472,515
Total net assets $266,871,590 $ 1,644,085
Primary
government
Component
Total units
Assets
Cash and cash equivalents $ 86,188,520 $21,347,376
Cash and investments with 1,456,175 1,733,994
fiscal agents
Current portion of 189,807,953 49,170
receivables (net)
Accrued interest 390,213 6,150
Due from component units 11,230,834 --
Due from other governments 23,815,220 2,476,066
Inventory of supplies 1,292,207 354,715
Prepaid and other assets 377,749 4,333,335
Long-term portion of notes 1,356,370 --
receivable
Capital assets
Land and construction 59,322,329 11,274,633
in progress
Other capital assets, net 174,950,198 15,366,367
Capital assets, net $234,272,527 $26,647,000
Total assets $550,187,768 $56,941,806
Liabilities
Accounts payable $ 10,621,294 $ 1,723,208
Matured coupons payable 61,923 --
Accrued liabilities 3,841,437 12,633,167
Deferred revenue 131,495,564 400,944
Due to primary government -- 11,230,834
Other short-term liabilities 2,199,298 310,589
Deposits 2,527,299 --
Long-term liabilities due 8,208,617 --
within one year
Long-term liabilities due in 122,716,661 3,460,923
more than one year
Total liabilities $281,672,093 $29,759,665
Net Assets
Invested in capital assets, $172,761,769 $26,641,000
net of related debt
Restricted for:
Capital projects 39,192,685 --
Unrestricted assets 56,561,221 541,141
Total net assets $268,515,675 $27,182,141
See accompanying notes to financial statements.
Exhibit 2: Statement of Activities
City of Alexandria, Virginia
For the fiscal year ended June 30, 2000
Program
revenues
Charges for
Functions/programs Expenses services
Primary government
Governmental activities:
General government $ 40,251,589 $ 50,542
Judicial administration 12,043,863 1,157,052
Public safety 68,036,032 8,753,589
Public works 31,289,107 5,756,105
Library 3,813,427 --
Health and welfare 62,249,282 5,503,852
Transit 5,004,487 --
Culture and recreation 12,447,385 1,747,020
Community development 9,284,253 80,228
Education 92,455,610 --
Interest on long-term debt 2,945,125 --
Total governmental activities $339,820,160 $23,048,388
Business-type activities
Recycling $ 638,750 $ 799,820
Total primary government $340,458,910 $23,848,208
Component units
Alexandria Library $ 4,271,298 $ 103,474
Alexandria Transit Company 5,627,499 1,554,139
Alexandria public schools 125,750,414 1,811,322
Total component units $135,649,211 $ 3,468,935
General revenues:
Taxes:
Real estate and
personal
property
Other
Payment from city of
Alexandria
Grants and
contributions not
restricted to
specific programs
Interest and
investment earnings
Miscellaneous
Total general
revenues
Change in net
assets
Net assets at
beginning of year,
as restated
Net assets at end
of year Program
revenues
Operating Capital
grants and grants and
Functions/programs contributions contributions
Primary government
Governmental activities:
General government $ 986,345 $ --
Judicial administration 3,620,036 5,819,073
Public safety 9,444,850 830,000
Public works 4,780,897 1,095,657
Library -- --
Health and welfare 28,156,781 --
Transit -- --
Culture and recreation 553,723 5,425
Community development 4,416,914 --
Education -- --
Interest on long-term debt -- --
Total governmental activities $ 51,959,546 $ 7,750,155
Business-type activities
Recycling $ -- $ --
Total primary government $ 51,959,546 $ 7,750,155
Component units
Alexandria Library $ 244,011 $ --
Alexandria Transit Company 42,766 --
Alexandria public schools 28,749,802 --
Total component units $ 29,036,579 $ --
General revenues:
Taxes:
Real estate and
personal
property
Other
Payment from city of
Alexandria
Grants and
contributions not
restricted to
specific programs
Interest and
investment earnings
Miscellaneous
Total general
revenues
Change in net
assets
Net assets at
beginning of year,
as restated
Net assets at end
of year
Net (expense) revenue and
charges in net assets
Primary government
Governmental Business-type
Functions/programs activities activities
Primary government
Governmental activities:
General government $ (39,214,702) $ --
Judicial administration (1,447,702) --
Public safety (49,007,593) --
Public works (19,656,448)
Library (3,813,427) --
Health and welfare (28,588,649) --
Transit (5,004,487) --
Culture and recreation (10,141,217) --
Community development (4,787,111) --
Education (92,455,610) --
Interest on long-term debt (2,945,125) --
Total governmental activities $(257,062,071) $ --
Business-type activities
Recycling $ -- $ 161,070
Total primary government $(257,062,071) $ 161,070
Component units
Alexandria Library $ -- $ --
Alexandria Transit Company $ -- --
Alexandria public schools $ -- $ --
Total component units $ -- $ --
General revenues:
Taxes:
Real estate and $ 189,211,248 $ --
personal
property
Other 75,040,938 --
Payment from city of -- 300,000
Alexandria
Grants and 19,119,696 --
contributions not
restricted to
specific programs
Interest and 7,308,161 --
investment earnings
Miscellaneous 705,468 --
Total general $ 291,385,511 $ 300,000
revenues
Change in net $ 34,323,440 $ 461,070
assets
Net assets at $ 232,548,150 $ 1,183,015
beginning of year,
as restated
Net assets at end $ 266,871,590 $ 1,644,085
of year
Net (expense) revenue and
changes in net assets
Primary
government
Component
Functions/programs Total units
Primary government
Governmental activities:
General government $ (39,214,702) $ --
Judicial administration (1,447,702) --
Public safety (49,007,593) --
Public works (19,656,448) --
Library (3,813,427) --
Health and welfare (28,588,649) --
Transit (5,004,487) --
Culture and recreation (10,141,217) --
Community development (4,787,111) --
Education (92,455,610) --
Interest on long-term debt (2,945,125) --
Total governmental activities $(257,062,071) $ --
Business-type activities
Recycling $ 161,070 $ --
Total primary government $(256,901,001) $ --
Component units
Alexandria Library -- $ (3,923,813)
Alexandria Transit Company -- (4,030,594)
Alexandria public schools -- (95,189,290)
Total component units -- $ (103,143,697)
General revenues:
Taxes:
Real estate and $ 189,211,248 $ --
personal
property
Other 75,040,938 --
Payment from city of 300,000 100,916,875
Alexandria
Grants and 19,119,696 --
contributions not
restricted to
specific programs
Interest and 7,308,161 26,536
investment earnings
Miscellaneous 705,468 224,602
Total general $ 291,685,511 $ 101,168,013
revenues
Change in net $ 34,784,510 $ (1,975,684)
assets
Net assets at $ 233,731,165 $ 29,157,825
beginning of year,
as restated
Net assets at end $ 268,515,675 $ 27,182,141
of year
See accompanying notes to financial statements.
RELATED ARTICLE: Executive summary. * GOVERNMENTS PREPARING TO IMPLEMENT GASB Statement no. 34 should study its requirements and those of related statements issued before and after it, especially Statement no. 33, Accounting and Financial Reporting for Nonexchange Transactions, and Statement no. 37, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments: Omnibus and Statement no. 38, Certain Financial Statement Note Disclosures. * RESOURCES ARE OF PARAMOUNT Paramount (pâr`əmount'), city (1990 pop. 47,669), Los Angeles co., S Calif.; inc. 1957. Originally a dairy region, it has become highly industrialized since the 1950s. IMPORTANCE in implementing the new financial reporting model Statement no. 34 introduced. Governments should assess their in-house In-house In the context of general equities, keeping an activity within the firm. For example, rather than go to the marketplace and sell a security for a client to anyone, an attempt is made to find a buyer to complete the transaction with the firm. skills and head count and determine whether they need assistance from consultants and other external parties, including their auditors, to properly implement the statement on time. * GOVERNMENTS SHOULD IDENTIFY THE INFORMATION that is necessary to convert fund-based statements to government-wide statements and determine whether it is currently available in government reporting systems. To do this, governments need additional data on fixed assets, capital and noncapital long-term debt, and internal balances and activities. * GOVERNMENTS MUST REPORT REVENUES ON AN ACCRUAL basis in government-wide statements in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with Statement no. 33. In addition, program revenues need to be properly identified and classified. Auditors may find that some governments underestimate the relevance of Statement no. 33, thereby hindering hin·der 1 v. hin·dered, hin·der·ing, hin·ders v.tr. 1. To be or get in the way of. 2. To obstruct or delay the progress of. v.intr. a proper implementation of Statement no. 34. * DATA ON INFRASTRUCTURE ASSETS are a required part of the new financial reporting model, and governments must decide when to begin recording them retroactively ret·ro·ac·tive adj. Influencing or applying to a period prior to enactment: a retroactive pay increase. [French rétroactif, from Latin . Under Statement no. 34, governments can delay their decision up to four years following implementation. They also must decide how far back to report. The minimum requirement is to report major infrastructure assets acquired in fiscal years ending after June 30, 1980. RELATED ARTICLE: GASB 34 implementation checklist. For the most part, producing the new government-wide statements will be a spreadsheet exercise in which information permitting modification to the accrual basis will be added to the fund-based financial statement. Below is a summary of key information needed to perform this conversion. In implementing GASB Statement no. 34, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments, governments must determine whether the necessary information is available from current systems or will have to be developed. Capital assets. Most governments have information on general fixed assets. But the following data, which are related to capital assets, also are required. * Accumulated depreciation accumulated depreciation The total amount of depreciation that has been recorded for an asset since its date of acquisition. For example, a computer with a 5-year estimated life that was purchased for $2,000 would have accumulated depreciation of $800 [( . * Current-year depreciation expense by functional area. * Current-year capital acquisitions by functional area. * Book value of capital assets disposed dis·pose v. dis·posed, dis·pos·ing, dis·pos·es v.tr. 1. To place or set in a particular order; arrange. 2. of during the year. Long-term debt. Although general long-term debt information is readily available to most governments, the following data also are necessary for financial reporting purposes. * Current-year capital debt payment by functional area. * Current-year capital debt issuance. * Current-year change in non-capital debt (for example, compensated absences) by functional area. * Accrued interest on long-term debt. * Current-year change in accrued interest. Internal balances and activities. Certain eliminations are needed to reduce the grossing up of assets and liabilities and to remove the doubling-up effect of internal service fund activity. The following is a list of additional information needs related to internal balances and activities. * Internal balances within funds that make up government activities. * Internal balances within funds that make up business activities. * The amount of purchases from the internal service fund for the year by functional area. Certain revenue items. Guidance on revenue recognition for nonexchange transactions is contained in GASB Statement no. 33, Accounting and Financial Reporting for Nonexchange Transactions. The major difference between fund statements and government-wide statements relates to taxes and grants that have not met the "available" criteria criteria (krītēr´ē  ),n. . Governments will have to track such revenues under the modified accrual and accrual methods. RELATED ARTICLE: Two Statements Modify GASB 34. * Statement no. 37, Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments: Omnibus, which clarifies certain provisions of Statement no. 34 and amends AMENDS. A satisfaction, given by a wrong doer to the party injured for a wrong committed. 1 Lilly's Reg. 81. 2. By statute 24 Geo. II. c. 44, in England, and by similar statutes in some of the United States, justices of the peace, upon being notified of an others. It addresses * Topics that should be covered in management's discussion and analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial (MD&A). * How to report a change from the depreciation method to the modified approach for infrastructure assets. * Classification of fines and forfeitures. * Criteria for determining whether a government or enterprise fund must be reported as a "major" fund. * The level of detail required for business activities in the statement of activities. * Eliminating the requirement to capitalize To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment. construction-period interest for government activities. Governments should implement Statement no. 37 simultaneously with Statement no. 34. For those that implemented Statement no. 34 prior to issuance of this amendment, the new requirements become effective for reporting periods beginning after June 15, 2000. * Statement no. 38, Certain Financial Statement Note Disclosures. This statement modifies, adds and deletes various note disclosure requirements and reaffirms that most such requirements continue to be relevant. Governments should implement Statement no. 38 simultaneously with Statement no. 34. For those governments that implemented Statement no. 34 prior to issuance of this amendment, the new requirements become effective for reporting periods beginning after June 15, 2000. BRUCE Bruce, Scottish royal family descended from an 11th-century Norman duke, Robert de Brus. He aided William I in his conquest of England (1066) and was given lands in England. W. CHASE, CPA, PhD, is an associate professor of accounting and director of the Governmental and Nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. Assistance Center at Radford University Radford University is a medium-size public, state-funded university in the City of Radford, in Southwestern Virginia, founded in 1910 as a women's college and coeducational since 1972. It was granted university status by the Virginia legislature in 1979. , Radford, Virginia Radford is an independent city in Virginia, United States. The population was 15,859 at the 2000 census. The Bureau of Economic Analysis combines the city of Radford with neighboring Montgomery county for statistical purposes. . His e-mail address See Internet address. e-mail address - electronic mail address is bchase@radford Radford, city (1990 pop. 15,940), surrounded by but independent of Pulaski and Montgomery counties, SW Va., on the New River; settled 1756, inc. as a city 1892. Motors, iron castings, clothing and textiles, and paper products are among the city's manufactures. .edu See .edu. (networking) edu - ("education") The top-level domain for educational establishments in the USA (and some other countries). E.g. "mit.edu". The UK equivalent is "ac.uk". . LAURA Laura, subject of the love poems of Petrarch. She is thought to be Laura de Noves (1308?–1348), wife of Hugo de Sade, but this has not been proved. Laura Petrarch’s perpetual, unattainable love. [Ital. Lit. B. TRIGGS, CPA, is the deputy director of finance/comptroller for the City of Alexandria, Virginia. Her e-mail address is laura.triggs@ci. alexandria.va.us. |
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