State and local government basics: funds, government-wide, and when to recognize revenue

The rules, one page each

1. General Fund capital outlays and debt vs government-wideSide by side

   General Fund capital purchases are expenditures and debt issued in a governmental fund is an other financing source. Government-wide governmental activities capitalize the asset and report long-term debt; interest expense is recognized when incurred.

2. Enterprise vs Internal Service: 'Payable Solely' and RollupDecision tree

   Report an activity in an enterprise fund when it charges external customers and any GASB trigger is met, such as (1) debt is secured solely by a pledge of the activity’s net revenues; (2) law or external regulation requires recovery of total costs through fees; or (3) the government has a formally adopted pricing policy to recover total costs, including capital. Otherwise, enterprise fund reporting is permitted (but not required) for activities that primarily serve external customers. Report an internal service fund when services are primarily to the government’s own departments; in government-wide statements, roll it into the activity column that predominantly uses it.

3. Permanent fund vs private-purpose trust vs custodial: who benefits and can principal be spent?Sort it

   Use a permanent fund when the principal must be maintained permanently and earnings support the government’s own programs or citizenry in general. Use a private-purpose trust fund when resources are held in trust for specific external individuals or organizations. Use a custodial fund when the government is a collecting/holding agent for others without a trust benefiting the government.

4. Special revenue vs capital projects vs debt service vs general fundSort it

   Report restricted or committed specific revenues that are expected to be a substantial, continuing source for a specified ongoing operating purpose in a special revenue fund. Report resources restricted or committed for constructing or acquiring governmental capital assets in a capital projects fund, and resources accumulated and used for principal and interest on general long-term debt in a debt service fund; otherwise use the General Fund.

5. GASB property tax and grants: availability and time restrictionsTimeline

   Under modified accrual, recognize property tax revenue when it is both measurable and available for the period intended to be financed; otherwise record a deferred inflow. For reimbursement grants, recognize revenue when allowable costs are incurred; for pure time restrictions, defer until the eligible period begins.

6. GASB major fund 10%/5% tests and component unit blendingSide by side

   A fund is major if any one element (assets and deferred outflows, liabilities and deferred inflows, revenues, or expenditures/expenses) is at least 10% of its fund category and at least 5% of the combined governmental-plus-enterprise total for that element. Include component units when the primary government is financially accountable; blend only when GASB blending indicators are met, otherwise discretely present.