Discuss the differences in measurement focus and basis of accounting related to:
The conceptual differences when comparing measurement focus verses the basis; measurement focus refers to what items are being reported in the financial statement. It measures both current and long term liabilities. The basis focuses on when transactions and events are recognized in the accounting records. (Copley, 2015).
Differences in revenue recognition as determined through modified accrual accounting; are recognized when measureable and available to finance the project during the period. (Copley, 2015).
Differences in expenses/expenditures recognition states that expenditures are recognized in the period in which the fund liability incurred. Expenditures not only affect the income statement; they affect other financial data synopses, which is what finance people often call accounting statements (Codjia, Demand Media). Expenses are recognized when they happen and affect ...view middle of the document...
GASB (2014) GASB Mission Retrieved July 2, 2014 from: http://gasb.org/
With regards to GASB rules for the financial reporting entity, answer the following:
Define the financial reporting entity: A primary government and all related component units if any.
Define and give an example of a primary government: A primary government is financially accountable for the organizations that make up its legal entity. It is also financially accountable for legally separate organizations if its officials appoint a voting majority of an organization's governing body (Copley, 2015). One example is my job with Miami Dade County Tax Collector which is the County Government.
Define and give an example of a component unit: Defined as legally separate organizations for which the elected officials of the primary government are financially accountable (Copley, 2015). An example would be park foundations, water boards and school boards.
Define and describe the two methods of reporting the primary government and component units in the financial reporting entity.
Discrete presentation entails reporting component unit financial data in one or more columns separate from the financial data of the primary government. Certain information should be disclosed about each major component unit included in the component units column.
Blending is required when the primary government and the component units are controlled by governing boards having the same members or the component unit provides services solely to the primary government (Copley, 2015).
Codjia M. Demand Media. The Difference Between Expenditures & Expenses Retrieved July 2, 2014, from http://smallbusiness.chron.com/difference-between-expenditures-expenses-31497.html
Copley, P. A. (2015). Essentials of accounting for governmental and not-for-profit organizations. (12th ed.). Boston: McGraw-Hill Irwin.
GASB, Financial Accounting Standards Board.. (n.d.). GASB Website Error Page. Retrieved July 2, 2014, from http://gasb.org/jsp/GASB/Page/GASBSectionPage