Governmental Financial Statement Analysis

Who uses S & L Government financial statements? Citizen Groups Legislative oversight officials Investors and Creditors

The Public Finance Market Primary (Original Issues) Secondary (Existing issues)

Financial Statement AnalysisState and Local Governments

Net Debt Per Capita: LTD/population LTD is adjusted by amount available

Net Debt Per Fair Value of Property LTD/Fair Value of Property

Interest Coverage: Enterprise Funds Operating Income/Interest Charges

Debt Service/Total Revenues Debt Service Exp/Total Revenues

Accounting for Special Purpose Government Entities General Purpose Governments

State and local governments that provide multiple services

Follow accounting as we have studied Chapters 2-8

Special Purpose Governments Limited, sometimes one type of service Fire protection, Library, Public Schools

Accounting Blips-Special Purpose Funds

Categories as to activities Single governmental activity

Combined G-W and Fund Financial Statements More than one governmental activity

GASB 34 to include G-W and Fund Statements Both governmental and business-type

activities GASB 34 and 35; G-W and Fund Statements

Only business-type activities (GASB 34-35) Only Fiduciary Activities (GASB 34)

Public Colleges and Universities Pre-GASB 35

AICPA Model or S & L Government Model GASB 35 amends GASB 34 to include

Public Colleges and Universities in S & L Government category

Same implementation dates Reporting Categories

Only governmental activities Both governmental and business-type Only business-type activities

Accounting Notes-Public C & U Most will probably report as entities engaged

only in business-type activities Accrual basis of accounting and economic

resources measurement focus Net Assets

Invested in Capital Assets, net of related debt Restricted (Expendable and Nonexpendable) Unrestricted

Capital assets and Infrastructure reported same as GASB 34

Foundations are often set up to manage restricted assets

Public C and U Continued Tuition discounts and scholarships for which

no work is performed reported as revenue reductions

Statement of Net Assets broken down into current and non-current assets and liabilities similar to FP business

Operating Income is distinctively displayed on Statement of R, E, and Changes in Net Assets

Non-operating revenue includes State appropriations, Gifts, and Investment Income

Cash Flow Statement is similar to B-T GASB 34