What are the five categories of fund balance on a governmental funds balance sheet?
GAAP financial statements report up to five separate categories of fund balance based on the type and source of constraints placed on how resources can be spent (presented in descending order from most constraining to least constraining): nonspendable fund balance, restricted fund balance, committed fund balance.
What are the types of governmental funds?
According to the GAAFR (the Blue Book), governmental funds are “used to account for activities primarily supported by taxes, grants, and similar revenue sources.” Within the category of Governmental Funds, there are five types: General Fund, special revenue funds, debt service funds, capital projects funds, and …
What is a fund balance category?
The restricted fund balance category includes amounts that can be spent only for the. specific purposes stipulated by constitution, external resource providers, or through. enabling legislation. The committed fund balance classification includes amounts that can.
What is fund balance in governmental accounting?
Most simply, fund balance is the difference between assets and liabilities in a governmental fund. The general fund, where a government accounts for everything not reported in another fund. Special revenue funds, for reporting specific revenue sources that are limited to being used for a particular purpose.
What are the 5 classifications of fund balance?
The new fund balance classifications will indicate the level of constraints placed upon how resources can be spent and identify the sources of those constraints. Constraints are broken down into five different classifications: nonspendable, restricted, committed, assigned, and unassigned.
How is year end fund balance calculated?
Fund Balance = Assets – Liabilities Nonspendable – inventory, prepaid items. Restricted – reserves.
What are the three classifications of funds?
There are three major types of funds. These types are governmental, proprietary, and fiduciary.
What are three types of funds?
Mutual fund investments can be classified into three types – money market funds, bond funds and stock funds. When investors are deciding which to utilize, they should consider investment strategies needed for each and their level of risk tolerance.
What is the purpose of a fund balance?
So what is the purpose of a fund balance? Well, according to Hall, it is, “intended to serve as a measure of the financial resources available in a governmental fund. It’s the measure of financial health of an individual fund.” It is also a driving factor behind maintaining tax rates.
What does fund balance include?
Fund balance is an accounting term to describe the difference between a fund’s assets and liabilities. For “cash basis” entities (the majority of local governments in Washington), fund balance represents the net cash after all revenues have been deposited and all expenses have been paid.
How much fund balance is enough?
The Government Finance Officers Association (GFOA) recommends, at a minimum, governments maintain an unreserved (not earmarked for a specific purpose) ending fund balance of no less than five to fifteen percent of its general fund operating revenues, or of no less than one to two months of regular general fund …
Which is the default fund balance for all governmental funds?
Assigned fund balance is also the “default” fund balance classification for all governmental funds except the general fund after nonspendable, restricted, and committed fund balance amounts have been identified.
Is there a deficit in the assigned fund balance?
Assignments may not create any deficit in unassigned fund balance. Assigned fund balance is also the “default” fund balance classification for all governmental funds except the general fund after nonspendable, restricted, and committed fund balance amounts have been identified.
Can a general fund be assigned to a specific purpose?
B) Resources in the General Fund may be assigned to a specific purpose if that is the intent of the government. C) Governments should not report assigned fund balance amounts if the assignment for specific purpose results in a negative unassigned fund balance.
How are fund balances reported in GASB Statement 54?
However, GASB recently issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions, which requires fund balance for governmental funds to be reported in classifications that clarify the constraints on how resources can be spent (as well as the sources of those constraints).