Question

In: Accounting

3.) Under GASB standards, agency funds are excluded from the face of the government-wide financial statements....

3.) Under GASB standards, agency funds are excluded from the face of the government-wide financial statements. What are agency funds? Why are they not presented in the government-wide statements?

4.) How does discrete presentation differ from blending? When is each appropriate?

Solutions

Expert Solution

3). Agency funds are those which are used to report resources held by the agency in the capacity of custodian. These resources/funds are the assets held for others and not for supporting agency's own program.

They are not presented in the governmnet-wide statements because agency funds are used to report resources held in custodian capacity by the agency for other individuals, private organizations or other governments and not for use for their own government programs.

Agency funds are required to prepare statement of changes in assets and liabilities.

4). Discrete presentation is when one or more components units are presentated separately in columns after those units which pertains to the primary government.

Blending presentation is when one or more components units transactions and balances are reported as they are part of the primary government. Component units are reported as they are part of primary government.

Blending is required when primary government and component units are controlled by the same governing body having the same members or the component units provide services solely to the primary government.

Discrete is required when the above mentioned both the conditions are not satisfied.

ekkarill92 answered 1 year ago
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