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1Accountability in Reporting
GASB and FASB Accounting Paper
Name
ACC/460
Instructor Name
March 6, 2012
2Accountability in Reporting
In this paper I will describe the different between GASB and FASB and their objectives of the
two standards. I will also provide how to modified accrual basis of accounting in which they
differs from full accrual accounting.
The GASB sets generally accepted accounting standards for the government except the federal
government and non-profit organizations while the FASB is for private and public organizations.
The objective of GASB is to create and set accounting standards that would ensure that financial
statements would be accurate for creditors, investors and to the public. The GASB really do not
have the power to enforce compliance with the standards but the authorities for its standard are
recognized under the code of professional conduct of the AICPA.
Week 2 Individual Problems
Chapter 1, E1-1
Prob. #
Question Answer
1. The traditional business model of accounting is inadequate for governments and not-for-profit organizations primarily because businesses differ from government and not-for-profit organizations in that
A
3. The primary objective of a not-for-profit organization or a government is to C4. In governments, in contrast to businesses, c5. The organization responsible for setting accounting standards for state and local
governments is the B
7. Governments differ from businesses in that they D8. Interperiod equity refers to a condition whereby C
Chapter 2, Question 12
What is a CAFR? What are its main components?
3Accountability in Reporting
Nebraska Budget Analysis
TEAM ASSIGNMENT
Name
Acc/460
Professor Temple Moore
March 12th 2012
The Comprehensive Financial Report of Nebraska allows for the viewer to see where the
state’s derives its largest form of revenue, what the expenditures of the state are and what the
state funded programs are.
According to the Comprehensive Annual Financial Report for the state of “Nebraska there was a
growth on the population of 6.7% from the year 2000 to 2010, it is estimated that there are 1,826,341
people living in the state of Nebraska in 2011” (Nebraska Department of Finances and Administration,
4Accountability in Reporting
2011). Nebraska’s young population makes up about one third of the state’s population, which is similar
to that of the nation’s average.
Nebraska continues to make progress as its population increases by providing needed services from its
“94% revenue which is derived from income taxes and sale taxes, “despite weak economic conditions
Nebraska continues to promote inter- period equity by paying for services as provided.
Chapter 4 – Exercise 4-1, answer # 1 through 10
1. Under the modified accrual basis of accounting, revenues cannot be recognized
d. Until they are measurable and available
2. ‘‘Available'' (as in ‘‘measurable and available'') means
a. Available to finance expenditures of the current period
3. Property taxes are an example of
b. An imposed non exchange transaction
4. To be considered ‘‘available,'' property taxes must have been collected either during the
c. Sixty days of year-end
5. For its fiscal year ending September 30, 2007, Twin City levied $500 million in property taxes. It collected taxes applicable to fiscal 2007 as follows (in millions):
June 1, 2006, through September 30, 2006 $ 20
October 1, 2006, through September 30, 2007 440
October 1, 2007, through November 30, 2007 15
5Accountability in Reporting
December 2007 4
Team Assignment
Name
Acc/460
Instructor Name
Date
6Accountability in Reporting
1. A government receives from a developer a donation of 1,000 acres of land valued at $4 million. In
return, the government grants the developer zoning variances on nearby property.
The transaction is a voluntary non-exchange from a nongovernmental source and should be
recognized as soon as the government receives the asset as a capital asset not revenue if the
government intends to keep the land and use it. If the land is expected to be sold, the asset should be
recorded in a general or capital projects fund with the following entry;
Land held for sale……………………………..4,000,000
Revenue from Donation………………………………...............4,000,000
If the government is not able to sell the land within the time before issuing financial reports, the
government should report the asset as referred revenue from donation with the following entry;
Chapter 10 Review and Discussion Question, 1, 5, 15
1. Permanent fund are nonexpendable and the government accounting standards
board(GASB) states that permanent funds are require when reporting in certain
programs in the government –wide statements. The funds are nonspendable. The
7Accountability in Reporting
modified accrual basis shows permanent funds unlike the fiduciary funds done with
full accrual. .
Fiduciary funds can be expendable or nonexpendable. These funds can also be held for outside parties whereas permanent finds are strictly government activities. So permanent funds would not necessarily contain depreciation.
Problem 5-11, part 3
a.
Grant Expenditure………………………………..5,000,000
Cash………………………………...........................................................1,000,000
Grant Payable………………………………..............................................4,000,000
To recognize a reimbursement grant expenditure (in 2013)
Although, the state announced a five million aware to the school district, the state only paid 1 million not the five million, which is restricted to time requirements. The other four million should be recoded as grant payable as the state is expected to paid the amount in the future.
b.
The grant should be recognized as an expenses in the same period in the government-wide as in the fund statements.
c.
The recipient will use the same approach to account for revenue in the fund and government-wide statements. An important factor is that the school district can not record revenue into the revenue is available for expenditure.
Chapter 12 Review and Discussion:
1. Temporarily restricted examples
a. Temporarily restricted asset are items that are received with a donor restriction
that is satisfied in the near future. An example is when a grant comes from the
government to purchase laptop for the district, which means the grant aids the
purchase of the laptops with it, but can be spent on other items need at that school.
8Accountability in Reporting
b. Pledges or contributions are restricted at times, which can come from
investments. When time restricting it involves a resource when using the time is
allotted for use. For instances, when money from a contribution is accepted but it
is in an investment funds then can only be used in sections and given a certain
times. For non-for-profit or government can only use the fund during 2014, when
the contribution was accepted by the not-for-profit or government. The
organization or donor sets the time restrictions.
Accountability in Reporting
ACC460
Date
Instructor Name
9Executive Summary
10Executive Summary
TO: Accountability Conference
FROM: Ann Hamilton, Accounting Student
DATE: ***********
SUBJECT: Accountability in Government Reporting
The public’s desire for increasing accountability on government and not-for-profit organizations
have risen in the last 10 years since Enron and World-com. Understanding how this influence on
the change in reporting requirements is the focus of this memo.
Executive Summary
ACC460
Name
Instructor Name
11GASB and FASB Accounting Paper
12GASB and FASB Accounting Paper
Executive Summary
The statement number 117 and 116 contains requirements for not-for-profit organizations. The
statement 116 focuses on accounting for contribution that are received and made. Statement 117
focuses on the standards that apply for external financial statement. Now both statements must
be in accordance to the Financial Accounting Standards board (FASB).
The statement 116 requirements and expectation for conditional and unconditional
promises, and each type of promises require revenue recognition at the fair value at the time
received and all expenses also. Contribution distinction of when a donor imposed restricted may
expire and if the net assets are restriction have a temporarily restricted, or a non-restricted is part
of the recoding requirements.
The Summary 116 aids in an expectation to non-financial assets, “Contributions of art,
historical treasures, and other non-cash assets are not revenues if the organization intends to keep
the items for exhibitions, educational factors, or research” (Summary of Statement of 116, 2012,
p. 1).
Nebraska Budget Analysis
TEAM ASSIGNMENT
Name
Acc/460
Instructor Name
Date
13GASB and FASB Accounting Paper
-
The Comprehensive Financial Report of Nebraska allows for the viewer to see where the
state’s derives its largest form of revenue, what the expenditures of the state are and what the
state funded programs are.
According to the Comprehensive Annual Financial Report for the state of “Nebraska there was a
growth on the population of 6.7% from the year 2000 to 2010, it is estimated that there are 1,826,341
14GASB and FASB Accounting Paper
people living in the state of Nebraska in 2011” (Nebraska Department of Finances and Administration,
2011). Nebraska’s young population makes up about one third of the state’s population, which is similar
to that of the nation’s average.
Nebraska continues to make progress as its population increases by providing needed services from its
“94% revenue which is derived from income taxes and sale taxes, “despite weak economic conditions
Nebraska continues to promote inter- period equity by paying for services as provided.