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Government and Not-For-Profit Organizations

Government and Not-For-Profit Organizations

#1. Government and Not-For-Profit Organizations (Professor)

What are some examples of government/not-for-profit organizations? How do proprietary businesses measure success following the FASB accounting guidelines? How do government organizations measure success following the GASB accounting guidelines?  Compare and contrast the differences between GASB and FASB.

#2 Government and Not-For-Profit Organizations ( Professor follow-up)

The GASB and the FASB are parallel bodies under the oversight of the Financial Accounting Foundation. The GASB covers guidance for state and local governmental organizations and and governmental not for profit organizations.

Per the slides a key difference is that financial accounting under FASB and GAAP utilize full accrual whereas governmental accounting uses a modified accrual method.

For a government agency, using modified accrual accounting means it can record cash flow that includes future budget funds or expected tax revenue. Governmental accounting and financial reporting standards aim to address [the] need for public accountability information by helping stakeholders assess how public resources were acquired and either used during the period or are expected to be used.

#3 Fund Accounting (Professor)

What is fund accounting? How does it compare to proprietary accounting? Why is it necessary? What are the major fund types?

#4 Re: Fund Accounting (Professor follow-up)

Governments must present three sets of fund financial statements: (1) governmental; (2) proprietary; and, (3) fiduciary. They are important because they assist financial statement users in assessing fiscal accountability by reporting on whether financial resources were raised and expended in compliance with budgetary and other legal provisions.

Proprietary fund financial statements present financial information for enterprise funds and internal service funds and proprietary fund accounting is more like for-profit accounting than the accounting for any other category of fund.

#5 CAFR (Professor)

What is the purpose of CAFR? What are the components of CAFR? Why is the Federal Government not subject to GASB 34? How do government-wide financial statements add information not available in fund financial statements?

#6 Re: CAFR (Professor follow-up)

A comprehensive annual financial report (CAFR) covers all activities of the primary government and provides an overview of all discretely presented component units of the reporting entity–including introductory section, management’s discussion and analysis (MD&A), basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, schedules, narrative explanations, and statistical section. [Source texbook]

GASB 34 “Basic Financial Statements–and Management’s Discussion and Analysis–for State and Local Governments” provides a comprehensive framework for financial reporting with the objective of making annual reports easier to understand and more useful to the people who rely upon the financial condition contained therein. The Federal Government is not subject as the issued guidance is specific to State and Local Governments.
 The government wide financial statements consolidates all of the operations and the fund financials separate such information.

 

 

 

Answer preview to Government and Not-For-Profit Organizations

1. Government and Not-For-Profit Organizations

 

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