Governmental Financial Statements

Topics: Financial statements, Balance sheet, Generally Accepted Accounting Principles Pages: 4 (1226 words) Published: September 23, 2013
Comprehensive Annual Financial Report (CAFR) Brief for the City of Topeka, Kansas


Abstract
The comprehensive annual financial report (CAFR) is prepared by governments—state, city, county, or municipalities—that allows the citizenry the opportunity to review the performance of fiscal responsibilities with all funds and activities of the primary government. Although CAFR is not mandated, it is encouraged, with adherence and publication for prepared statements and disclosures in accordance with generally accepted accounting principles (GAAP). Additionally, the government accounting standards board (GASB) codification §2200 requires CAFR to include an “introductory section, management’s discussion and analysis (MD&A), basic financial statements, required supplementary information other than MD&A, combining and individual fund statements, schedules, narrative explanations, and statistical section” (Copley & Engstrom, 2011, p. 20). Also there are variant differences between governmental financial statements—funding constituent services—and for-profit entities with a responsibility to increase stockholder equity. The relative differences will be reviewed for the City of Topeka’s (herein referred to as City or COT) CAFR for year ending December 31st, 2010.  

Differences in governmental accounting and for-profit financial accounting auditor opinions are required for both governmental accounting and for-profit entity accounting. Additionally, MD&A is presented at the beginning of CAFR as opposed to for-profit entities annotating MD&A after the presentation of their financial statements; income statement, balance sheet, and statement of cash flows. Furthermore, capital assets and long-term debt do not appear on the balance sheet as they would on a for-profit entity balance sheet. For governmental financial statements, the statement of cash flows is only reported for proprietary funds, whereas, for-profit entities are required to present a statement of cash...

References: City of Topeka (COT) Annual Financial Report (CAFR), http://www.topeka.org/administrative/ComprehensiveAnnualFinancialReport.shtml, http://www.topeka.org/pdfs/AnnualFinancialReportversusCAFR.pdf, retrieved 27Jul12.
Copley, P. A., & Engstrom, J. H. (2011). Essentials of accounting for governmental and not-for-profit organizations (10th ed.). New York, NY: McGraw-Hill.McConnell, C., & Brue, S. (2005). Economics: principles, problems and policies (16th ed.). New York: McGraw-Hill.
Generally Accepted Accounting Principles, Statement 14, The Financial Reporting Entity
Generally Accounting Standards Board Statement 37, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments: Omnibus—an amendment of GASB Statements No. 21 and No. 34
Government Accounting Standards Board, Codification §2200
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