Ives Gnfpacct7e Ppt06

8/9/2019 Ives Gnfpacct7e Ppt06

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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 61

Introduction to !o"ern#ental and

$ot%orPro%it &ccounting, 'e

Chapter 6( )he !o"ern#ental *und&ccounting Cycle

Capital Pro+ects *unds, ebt -er"ice *unds,and Per#anent *unds


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Chapter 6 )opics

/easure#ent *ocus and asis o%&ccounting

Capital Pro+ects *unds CP* ebt -er"ice *unds -*

eased &ssets

Per#anent *unds


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Capital Pro+ects *unds( 4e"ie5

sed to account %or %inancial resourcesrestricted or other5ise li#ited to spending%or capital outlays

7&c8uisition or construction o% capital %acilitiesor other capital assets

4e8uired to use CP* i% capital outlays

%inanced %ro# general obligation bondproceeds



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ebt -er"ice *unds( 4e"ie5

sed to account %or %inancial resourcesthat are restricted or other5ise li#ited tospending %or principal and interest on

general longter# debt7 !eneral longter# debt typically bac9ed by%ull %aith and credit o% go"ern#ent

4e8uired 5hen

7 egally #andated7 *inancial resources being accu#ulated %or

principal and interest pay#ents that co#e duein %uture years

Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 6:


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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 6;

Capital Pro+ects and ebt -er"ice*unds( In !eneral

argescale public 5or9s pro+ects

Controlled by capital budget

E


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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 6B

udget to build a sports co#plether %inancing source

longter# debt issued 10,000,000

Capital Pro+ects *unds(>perating Entries

grantbond

$otice( no longter# liability recorded


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Capital Pro+ects *unds(earEnd

Close budgetary accounts

7 ebit appropriations

7 Credit esti#ated re"enues, esti#ated other%inancing sources

Close operating accounts

7 ebit re"enues, other %inancing sources

7 Credit e


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Capital Pro+ects *unds(earEnd

Close encu#brance accounts

7 ebit budgetary %und balance reser"ed %orencu#brances

7 Credit encu#brances

Prepare %inancial state#ents

7 -tate#ent o% re"enues, e


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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 61'

iscount( debit other %inancing usebond issue discount

7 -cale do5n pro+ect >47 -ee9 additional resources

ond issued bet5een interest

pay#ent dates7 uyer pays accrued interest

7 4ecord directly in debt ser"ice %und

onds( Issued at a iscount,et5een ates


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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 61@

&rbitrage

orro5 #oney at lo5er ta


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ebt -er"ice *unds( >"er"ie5

!eneral obligation debt

7 $ot ser"iced by enterprise=internal ser"ice%unds

&lso #ay be used %or other longter#obligations

7 Install#ent purchases

7 $otes

Encu#brance accounting unnecessary


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ebt -er"ice *unds( >"er"ie5

>nly shortter# liabilities in go"ern#ental%unds

ongter# liabilities

7 4eported 5hen due and payable



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)ypes o% !o"ern#ent ebt

eases

-er"ice concession arrange#ents

7 >perator %inances and builds a %acility e.g., aroad %or a go"ern#ent

7 !o"ern#ents o5ns %acility )rans%ers right to use to operator %or a speci%ied

nu#ber o% years7 >perator charges and collect %ees %or use o%

%acility



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ebt -er"ice *unds( &ccounting

Interest and principal e


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ebt -er"ice *unds(>perating Entries

G10,000,000 bonds in capital pro+ects %und7 ;D interest, se#iannually G;,000 agent %ee

7 G1,2;0,000 property taperating Entries

E


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&d+ust in"est#ents to %air "alue

Close budgetary accounts

Close operating accounts 4estricted, co##itted, or assigned %und

balance %or debt ser"ice

*inancial state#ents7 -tate#ent o% re"enues, e


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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 62'

ebt -er"ice *unds(Principal Pay#ent

iability recorded only 5hen due

E


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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall 62@

eased &ssets(Capital ease

present "alue o%lease pay#ents

on?t consider i%lease ter# is in last2;D o% asset?secono#ic li%e

I% noncancelable and7 >5nership or bargain

purchase option

7 )er# ';D asset?secono#ic li%e >4

7 Present "alue o% pay#ents B0D */

Initial entry( $o e%%ect on %und balance

Ether %inancing sources

capital leases @62,:26


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eased &ssets(Capital ease, >perating ease

Capital lease( entry %or pay#entsE


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Per#anent *unds "s. *iduciary*unds

Per#anent %unds

7 >nly earnings used

7 /ust support go"ern#ent?s o5n progra#s

*iduciary %unds

7 ene%it entities or indi"iduals outside thego"ern#ent



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Copyright 2013 Pearson Education, Inc. publishing as Prentice Hall

Per#anent *unds( &ccounting

631

)o establish %und(Cash ;,000,000

4e"enuesbe8uest ;,000,000In"est#ents ;,000,000

Cash ;,000,000 Earnings(Cash 200,000

4e"enuesin"est#ent inco#e 200,000

Eperating e


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Copyright 2013 Pearson Education Inc publishing as Prentice Hall 633

&ll rights reser"ed. $o part o% this publication #ay bereproduced, stored in a retrie"al syste#, or trans#itted,

in any %or# or by any #eans, electronic, #echanical,photocopying, recording, or other5ise, 5ithout the prior5ritten per#ission o% the publisher. Printed in the nited-tates o% erica.

Ives Gnfpacct7e Ppt06

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