Governmental Financial Accounting, Reporting and Budgeting: Demonstrate an understanding of the influences, objectives and role of standards, including: The unique financial aspects of the governmental environment that differ from the private sector for example, profit versus service, importance of budget.
Summary of Statement No. In a nonexchange transaction, a government gives or receives value without directly receiving or giving equal value in return. This is different from an exchange transaction, in which each party receives and gives up essentially equal values.
The principal issue addressed in this Statement is the timing of recognition of nonexchange transactions—that is, when should governments recognize them in the financial statements? Classes of Nonexchange Transactions This Statement identifies four classes of nonexchange transactions based on shared characteristics that affect the timing of recognition: Derived tax revenues, which result from assessments imposed on exchange transactions for example, income taxes, sales taxes, and other assessments on earnings or consumption Imposed nonexchange revenues, which result from assessments imposed on nongovernmental entities, including individuals, other than assessments on exchange transactions for example, property taxes and fines Government-mandated nonexchange transactions, which occur when a government at one level provides resources to a government at another level and requires the recipient to use the resources for a specific purpose for example, federal programs that state or local governments are mandated to perform Voluntary nonexchange transactions, which result from legislative or contractual agreements, other than exchanges, entered into willingly by the parties to the agreement for example, certain grants and private donations.
Time Requirements and Purpose Restrictions This Statement distinguishes between two kinds of stipulations on the use of resources: Different standards apply for each kind of stipulation. Time requirements specify a the period when resources are required to be used sold, disbursed, or consumed or when use may begin for example, operating or capital grants for a specific period or b that the resources are required to be maintained intact in perpetuity or until a specified date or event has occurred for example, permanent endowments, term endowments, and similar agreements.
Time requirements affect the timing of recognition of nonexchange transactions. Purpose restrictions specify the purpose for which resources are required to be used.
Purpose restrictions should not affect when a nonexchange transaction is recognized. However, governments that receive resources with purpose restrictions should report resulting net assets, equity, or fund balance as restricted or a reservation of fund balance for governmental funds.
However, for revenue recognition to occur on the modified accrual basis, the criteria established in this Statement for accrual-basis recognition should have been met and the revenues should be available. Also, this Statement continues the guidance in NCGA Interpretation 3, Revenue Recognition—Property Taxes, as amended, for recognizing property taxes on the modified accrual basis of accounting.
The timing of recognition for each class of nonexchange transactions is outlined below. The accrual basis of accounting is assumed, except where indicated for revenue recognition. On the modified accrual basis of accounting, revenues should be recognized when the underlying exchange has occurred and the resources are available.
Resources received before the underlying exchange has occurred should be reported as deferred revenues liabilities. Resources received or recognized as receivable before the time requirements are met should be reported as deferred revenues.
For property taxes on the modified accrual basis, governments should apply NCGA Interpretation 3, as amended. Eligibility requirements are established by the provider and may stipulate the qualifying characteristics of recipients, time requirements, allowable costs, and other contingencies.
On the modified accrual basis, revenues should be recognized when all applicable eligibility requirements are met and the resources are available. For transactions in which the provider requires the recipient to use sell, disburse, or consume the resources in or beginning in the following period, resources provided before that period should be recognized as advances providers and deferred revenues recipients.
Other Provisions and Illustrations This Statement also provides guidance on recognizing promises made by private donors, contraventions of provider stipulations, and nonexchange revenues administered or collected by another government.
Appendix C includes a chart summarizing the classes of nonexchange transactions and recognition requirements.
Appendix D includes cases to illustrate how nonexchange transactions should be classified and when they should be recognized in accordance with this Statement. Effective Date The provisions of this Statement are effective for financial statements for periods beginning after June 15, Earlier application is encouraged.
Unless otherwise specified, pronouncements of the GASB apply to financial reports of all state and local governmental entities, including general purpose governments, public benefit corporations and authorities, public employee retirement systems, utilities, hospitals and other healthcare providers, and colleges and universities.
Paragraphs 2 and 3 discuss the applicability of this Statement.XYZ Holdings (Singapore) Limited Preface Scope of this publication This illustrative financial statements are an illustration of the annual financial statements of a.
A financial statement review is a service under which the accountant obtains limited assurance that there are no material modifications that need to be made to an entity's financial statements for them to be in conformity with the applicable financial reporting framework (such as GAAP or IFRS.
Contingencies in SFAS No. 5 [Since ] The definition adopted by the US Financing Accounting Standards Board (FASB) in its standard “Accounting for Contingencies“, Statement of Financial Accounting Standard No. 5 (SFAS No. 5) (), is. a contingency is defined as an existing condition, situation, or set of circumstances involving uncertainty as to possible gain or loss to.
Terminology • Balance Sheet – Snapshot of financial position at a specific point in time • Income Statement – Reflects activities over a period of time.
SEC's focus on compliance with loss contingency disclosures under ASC 1 in connection with litigation contingencies. This Financial Reporting Alert highlights certain aspects of loss contingency disclosures that will be subject to heightened scrutiny by the SEC and the FASB this reporting season.
2 The meeting was in response to. Management's Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports Frequently Asked Questions (revised October 6, ) 1 May 12,