Question

Explain where the budgetary comparison schedule is located. Why would it be in that location? Consider the GASB requirements for external financial reporting.

·       

Answer 1

Budget comparison information can be found either in RSI or in the basic financial statements.

Financial statements for external use must include the following information:

• Whole-of-government financial statements
• Financial statement of the fund
• Footnotes
• Additional information required

The balance of public funds can be classified in the following funds:

• Non-expendable fund balance
• Restricted fund balance
• Balance of committed funds
• Restricted fund balance
• The balance of the unrestricted fund

Budget comparison information can be found either in RSI or in the basic financial statements. It is required for the general fund and the special revenue fund. The budget is thus prepared for these purposes. The GASB believes that budget comparison information can be reported more appropriately in RSI rather than in the basic financial statements. This comparative information is part of the general purpose financial statements.

The GASB is responsible for creating the rules and setting requirements for local and state governments for the purposes of external reporting. The information should be useful to users for decision-making purposes. Relevant data should guide the public, such as issuers, auditors and other users of financial information. For external reports, the budget comparison schedule would be found in RSI or the basic financial statements. The financial statements should contain the following information:

• Whole-of-government financial statements Financial statement of the fund
• Footnotes
• Additional information required

The balance of public funds can be classified in the following funds:

a) Balance of the non-expendable fund in which the amounts which are to be maintained or not expendable are declared.

b) Restricted fund balance which involves the amounts that can be spent by the government for a particular purpose.

c) Balance of committed funds which includes the balance for specific purposes which is decided by the decision-making authority.

d) Restricted fund balance which includes the amount which is neither allocated nor committed but which is still used for specific purposes.

e) The balance of the unrestricted fund is considered a residual classification and the amount which is not included in any other classification is included.