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.