Copley政府与非营利组织会计10版Chapter1

1、Essentials of Accounting for Governmental and Not-for-Profit OrganizationsChapter 1Introduction to Accounting and Financial Reporting for Governmental and Not-for-Profit Organizations McGraw-Hill/IrwinCopyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.1-2Overview of Chapter 1nWhy

2、study GNP accountingnDifferences in the environment that cause GNP accounting to differ from business accounting nGNP accounting standard settersnOverview of financial statementsnFund Types1-3Why Study GNP Accounting?nGovernments and NFP organizations hire accountants nCPA firms and states engage ac

3、countants to perform their auditsnAs citizens and donors we wish to better understand how taxes and charitable donations are used1-4Differences in the GNP Environment nOrganizational Purposes: Governments exist for the well being of citizens by providing public services, not for the purpose of gener

4、ating returns to owners.nSources of Revenues: Governments derive many of their resources from taxes and other non-exchange transactions. 1-5Differences in the GNP EnvironmentnPotential for Longevity: Governments very rarely go out-of-business. This long term view of operations changes the focus of a

5、ccounting to a longer-term focus on the sustainability of services and the ability to meet future demand.nRelationship with Stakeholders: Governments have an obligation to demonstrate accountability for public funds. nRole of the Budget: Government budgets often carry the authority of law, preventin

6、g public officials from spending outside their budgetary authority. 1-6How Accounting Must Adapt to GNP Environmental DifferencesnTraditional view of the equity accounts must be modifiednBudget compliance may be more important than income measurementnWhen do we recognize revenue for non-exchange tra

7、nsactions?nReports must reflect the existence of restrictions on the use of certain resources nNon-financial performance measures are relatively more important1-7U.S. STANDARD SETTERSnFederal levelhFASAB - Federal Accounting Standards Advisory BoardhGAO Governmental Accountability OfficehU.S. Treasu

8、ry DepartmenthOMB - Office of Management and BudgetnState and Local Government (SLG)nGASB - Governmental Accounting Standards BoardhPrivate (non-governmental) Not-for-profits hFASB - Financial Accounting Standards Board 1-8STANDARD SETTERS contdState and Local - GASB formed in 1984nCovers basic gove

9、rnments and entities owned or controlled by governmentsnPredecessor: NCGA - National Council on Governmental AccountingNot-for-profits - FASB formed in 1973 iCovers not-for-profits not related to government entities private nonprofit hospitals, colleges, museums, etc.iPredecessors: iAccounting Princ

10、iples Board (1959-1973) and Committee on Accounting Procedures (1939-1959)1-9Authoritative LiteraturenStatements, Interpretations, and Technical Bulletins are primary literature that specifies GAAP (generally accepted accounting principles)nHowever, in absence of adequate guidance, auditors may look

11、 at other documentsnGAAP hierarchy (Illustration 1-2) guides the auditor in the priority of importance for accounting guidance1-10State and Local Government:GAAP hierarchyCategoryGASB (STATEMENT 55)State and Local GovernmentsA.GASB Statements and InterpretationsB.GASB Technical Bulletins and, if cle

12、ared by the GASB, AICPA Industry Audit and Accounting Guides and Statements of PositionC.AICPA Practice Bulletins that have been cleared by the GASBD.Implementation guides (Q&As) published by the GASB staff, and practices that are widely recognized and prevalent in state and local governments.1-

13、11Concepts StatementsnConcepts project began in the 1970s to guide the standard setters in establishing GAAPnConcepts statements guide the development of new standardsnThese are not intended as authoritative GAAP, concepts statements but are used for guidance only if no other literature addresses an

14、 issue1-12Concepts StatementsnAll three standard setting bodies have a series of Concepts Statements:nFASAB federal governmentnFASB private entitiesnGASB state and local governments1-13FASAB Concepts: Objectives for Federal Financial ReportsnBudgetary Integrity demonstrate budget regulations were ad

15、hered tonOperating performance help evaluate service, efforts, and accomplishmentsnStewardship show the impact on operations and investmentsnSystems and controls indicate whether they are adequate1-14FASB Concepts Statement No. 6: Objectives of NFP Financial reportsnMain Objective of NFP Financial S

16、tatements isnTo provide information useful to present and potential resources providers and others in making decisions about allocating resources to the NFP organizationnWhich emphasizes thatnDonors, government grantors and banks are primary users 1-15GASB Concepts Statements: Statement #1 Objective

17、s nCitizens have a right to know why resources are being raised and how they will be usednGASB #1 Objectives of Financial Statements:oAllow comparison of actual with budgeted resultsoHelp users assess financial condition and results of operationsoShow compliance with laws, rules and regulationsoAssi

18、st in evaluating efficiency and effectiveness1-16Concept Statement #2nService Efforts and Accomplishments Reporting (covered in Chapter 13) and amended by Concepts Statement 5nIncludes both Financial and Nonfinancial measures of performance1-17Concept Statement #3nCommunication Methods in General Pu

19、rpose Financial Reports that Contain Basic Financial StatementsnEstablished the framework for what information is presented in:nBasic Financial StatementsnNotesnRequired Supplementary InformationnSupplementary Information1-18How Do GASBs Objectives Differ from Business Objectives? nThere is more emp

20、hasis onnThe budgetnLegal compliancenEfficiency and effectiveness measures other than net incomenGASB Concepts Statement No. 2 explains that nonfinancial measures (i.e. measures other than dollars) are required to assess effectiveness1-19CodificationsnThe GASB, FASB and FASAB publish codifications (

21、organized versions) of accounting standards. As you would expect, the GASB Codification includes statements, interpretations and technical bulletins issued by the GASB. However the Codification also includes level-B standards issued through AICPA Audit and Accounting Guides and Statements of Positio

22、n. 1-20Using the GASB codificationnCodification references are presented in two parts: the first (section) identifies a topic and the second identifies a paragraph within the codification. 1-21Section #sTopics1000 - 1900General Principles2000 - 2900Broad Financial Reporting RequirementsLetters (A Z)

23、Specific Balance Sheet or Operating AccountsDouble lettersSpecialized Industries or Reporting UnitsParagraph #sLevel of Authority100 - 499GASB Standards (Level A GAAP)500 - 599Definitions600 - 699GASB Technical Bulletins and AICPA Audit and Accounting Guides and Statements of Position (Level B GAAP)

24、700 - 799AICPA Practice Bulletins (Level C GAAP)900 - 999Non-authoritative discussionsFormat of Codification References1-22Required Content of Governmental Financial Reports1-23Overview of Basic Financial StatementsnGovernment-wide StatementsnStatement of Net Assets (Statement of Net Position after

25、2013)nSimilar to business balance sheetnStatement of ActivitiesnSimilar to business income statementnFund Financial StatementsnDetailed reports of governmental, proprietary, and fiduciary activitiesnIllustrated in Chapter 21-24Overview of Fund Financial StatementsnGovernmental general citizen servic

26、es nBalance SheetnStatement of Revenues, Expenditures, and Changes in Fund BalancenProprietary business-like activities such as water utilitynStatement of Net Assets (Statement of Net Position after 2013) Statement of Revenues, Expenses, and Changes in Fund Net Assets/PositionnStatement of Cash Flow

27、snFiduciary holding money in trust for othersnStatement of Fiduciary Net Assets (or Net Position)nStatement of Changes in Fiduciary Net Assets (or Net Position)1-25Reporting PerspectivesnInternal accounting still tends to emphasize individual funds (pools of money)nGovernment-wide reports are an att

28、empt to aggregate data into a format more familiar to users business-type financial statements1-26Accrual and Modified Accrual BasisnAccrual Basis/Economic Resources Measurement Focus: nGeneral business concepts of revenue and “expense” apply when recording exchange-like transactionsnModified Accrua

29、l Basis/Current Financial Resources Measurement Focus:nApplies to funds financed by taxes and other involuntary contributions1-27Modified Accrual BasisnRevenues are recorded when “measurable and available”nFor example, property taxes revenues are recorded as revenues if levied this year and collecte

30、d this year, or soon enough after the year end to still pay current year billsnOutflows are called “expenditures”nExpenditures are recorded in the fund when a liability is incurred1-28Implications for Revenues Under Modified Accrual BasisnIn the absence of an earning process, when should revenue be

31、recognized? nGASB (and FASB) Statements specifically address recognition of non-exchange and contribution revenues1-29Expenses vs ExpendituresnUnder accrual accounting, expenses are recognized when the related resource or service is used nDepreciation expense on fixed assets is recognized over the s

32、ervice life of the asset1-30Expenses vs ExpendituresnExpenditures under modified accrual are recorded when the liability is incurrednEquipment purchases are treated as expenditures as soon as you are obligated to pay when the goods arrivenLong-term assets, such as equipment, are not listed on the fu

33、nd balance sheet1-31More Implications of Modified AccrualnIssuance of bonds is treated as a Financing Source, inflow on activity statementnLong term debt is not listed on the fund Balance SheetnPayments of principal on long-term debt are treated as an expenditure 1-32Fund vs. Government-Wide Stateme

34、ntsnGovernment-wide statements use the accrual basis and report long-term assets and liabilities for both governmental and business activitiesnFund perspective statements use the modified accrual basis for governmental type funds which do not recognize long-term assets and long-term liabilities on g

35、overnment fund balance sheet1-33Fund and Government-Wide ReportingnTwo perspectives allow users to see nLong run accrual basis effectsnShort run budget oriented “current spending” effects1-34Long-Term Assets and Debt in Government-Wide vs. Fund StatementsnGovernmental-type balance sheets generally s

36、how only short-term assets and liabilitiesnProprietary-type balance sheets show both short-term and long-term assets and liabilitiesnGovernment-wide statements must report short-term and long-term assets and liabilities in the Statement of Net Assets/PositionnTherefore, total assets and liabilities

37、will differ between the two types of statementsnStatements will include a reconciliation schedule 1-35What is a “fund” - as the term is used for state and local government accounting?nA fund nRepresents a part of the activities of some organizationnIs an accounting entitynSelf-balancing set of accou

38、nts, reflecting the assets, liabilities, net assets, and changes in those balancesnSegregates resources for specific activities nIn such a way as to ensure compliance with appropriate regulations or restrictions1-36State and Local Government Fund TypesnGovernmental typenUsed for activities that are

39、largely unique to the government environmentnProprietary typenBusiness-type activitiesnFiduciary typenActing as an agent or trustee of moneys that generally belong to other parties1-37Five Governmental-Type FundsnPERMANENT FUNDS - account for and report resources that are restricted to the extent th

40、at only earning, and not principal, may be used for purposes that support the reporting governments programsnCAPITAL PROJECTS FUNDS - account for and report financial resources that are restricted, committed or assigned to expenditure for capital outlays. As such, it accounts for the purchase or con

41、struction of major capital improvements, except those purchased or constructed by a proprietary (and less commonly, fiduciary) fund1-38Five Governmental-Type FundsnDEBT SERVICE FUNDS - account for and report financial resources that are restricted, committed or assigned to expenditure for principal

42、and interest, other than interest or principal on proprietary or fiduciary activities.1-39Five Governmental-Type Funds, contnSPECIAL REVENUE FUNDS - account for and report the proceeds of specific revenue sources that are restricted or committed (not merely assigned) to expenditure for specified pur

43、pose other than debt service or capital projects. These include activities funded by federal or state grants or by taxes specifically restricted to certain activities.nGENERAL FUND accounts for most of the basic services provided by the government. Technically, it accounts for and reports all financ

44、ial resources not accounted for and reported in another fund.1-40Two Proprietary Funds TypesnENTERPRISE FUND - An enterprise fund is a fund established for the purpose of measuring net income for a governmental department providing goods or services primarily to outside consumers, in which it is the

45、 intent of the government that the department operate on a cost-recovery or profitable basis.nINTERNAL SERVICE FUND - An internal service fund is a fund established for the purpose of measuring net income for a governmental department providing services primarily to other departments or agencies within the government, in which it is the intent of the government that the department operate on a cost reimbursement