ACC548 Comprehensive Report.docx
ACC548 Comprehensive Report.docx PRG211
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Date Created: 11/11/15
1 I Comprehensive Reporting Comprehensive Annual Financial Reporting Letitia Edwards ACC548 August 15th 2013 Joe WalthourJr 2 I Comprehensive Reporting For pro t accounting differs from government accounting in several aspects Missions and budgets are just a few of those differences The way they both report their accounting is different as well with governments being encouraged to report with a CAFR or Comprehensive Annual Financial Report This paper will entail some of the differences between for pro t and government accounting description of a CAFR and a breakdown of the City of Gulfport Mississippi CAFR for the scal year 2011 Government accounting and forpro t accounting can have similarities with their reporting These accounting styles also have several differences One of the major differences is that they have different missions The main objective for a business is to earn a pro t Copley 2011 Their main goal is maximizing pro ts or their cash ows With government accounting the goal is different The company needs to make a pro t their main focus is to keep the government and the component units of the government running smoothly Creating a pro t in a for pro t organization is a positive thing for the company This means that the company is able to expand and pay off dividends to shareholders When there is a pro t in government accounting this could mean negative things for the company The money that the government receives basically helps to continue the basic functions to their citizens When the revenues exceed the expenditures this could mean that some basic services have had to be reduced Copley 2011 The government does not want to reduce the services to its citizens if possible The missions are not the only differences in the government and forpro t accounting Another difference is the budgets between the two Budgets not the marketplace govern over the nances Copley 2011 The expenditures of the government dive the revenues This means that the government establishes the 3 Comprehensive Reporting level of service they want to provide calculate costs and sets tax rates and fees to acquire the funds Copley 2011 There is no link between revenues and expenses lf donations are given that exceed the amount given the year before expenses will still be the same even though revenue has increased The capital assets play a different role in the government accounting Valuing assets will not work as well in government as it does in forpro t companies An example is a new highway being built This highway does not yield cash bene ts at least not directly to the government Copley 2011 Other examples would be taxes membership dues and resources may be restricted to only that purpose regardless of how worthy other purposes may be Because the accounting styles are different between forpro t and government accounting it only goes to show that they would report differently as well State and local governments according to the GASB Codi cation Sec 220 are highly encouraged to prepare a CAFR or a Comprehensive Annual Financial Report Copley 2011 This report gives a thorough and detailed presentation of the nancial condition of the state and local government Copley 2011 The CAFR reports on the state or local governments activities and balances for each scal year and is composed of three sections Introductory Financial and Statistical sections Copley 2011 The CAFR gives a full nancial disclosure to any interested parties including the citizens of the state or local government Copley 2011 Anyone who is interested can look at the CAFR and know where their tax money is going and what it is being used for Like many cities across the United States Gulfport Mississippi has a CAFR for their local government It does have the required three sections to show the activities and balances for the scal year The CAFR also discloses a MDampA section 4 I Comprehensive Reporting or the Management Discussion and Analysis section This section gives in plain terms an overview of the governments nancial activities Department of Finance and Administration 2011 Several items must be included in the MDampA section Brief discussion of the nancial statements Condensed nancial information Analysis of the governments overall nancial position Analysis of balances and transactions of individual funds Analysis of signi cant variations between original and nal budget amounts Description of signi cant capital asset and longterm debt activity Discussion by governments that use the modi ed approach to report infrastructure assets Description of any known facts decisions or conditions that have a signi cant impact on the nancial position of the government Department of Finance and Administration 2011 The CAFR being reviewed is from the scal year ending September 30th 2011 The City of Gulfport is the nancial reporting entity or the primary government The City of Gulfport is composed of component entities which are the legally separate organizations for which the elected of cials of the primary government are nancially accountable Department of Finance and Administration 2011 These components for the City of Gulfport include Public Safety Public Works non water amp sewer Culture and recreation Urban Development Capital Projects Debt service General Administration Gulfport Water amp Sewer Department of Finance and Administration 2011 5 Comprehensive Reporting The CAFR of the City of Gulfport has shown that from the year 2010 the overall nancial status has stabilized The total assets for the city have increased from 546 million to 598 million representing a 10 increase Department of Finance and Administration 2011 Most of this increase is from the rebuilding from Hurricane Katrina that the city has been doing Another impact shown from Hurricane Katrina is the city39s capital assets which increased from 503 million to 557 million Department of Finance and Administration 2011 The city39s overall debt outstanding decreased by 4 million going from 137 million to 133 million in 2011 Department of Finance and Administration 2011 The city39s revenues do exceed their expenses at this time by 49 million for the year Department of Finance and Administration 2011 Most of this according to the CAFR is due to grants and contributions received to help with the recovery from Katrina Other income for the city comes from property taxes sales taxes gaming and service fees and nes So the city may ask what is that money used for The money that the city receives is used for several items to better the city These items are the components of the city such as public safety public works water and sewer health and welfare and general government Below is a pie chart from the CAFR showing the percentages of where the money comes from and how it is used Department of Finance and Administration 2011 6 Comprehensive Reporting 1 n rs Where lees the Crty39e Meney Ceinne Haw 395 the Mane 53391 EI Charges lF ubllic Safety 31 fur I General Glev39t we Sen ice 3 Fines 25 g39 I Pulblie W39eink s I Grants 12 3T 1 El Gaming Him a 1 g Eel Elev 39 a 2 I ther El water 3 n 39 SEW 39 I euitum e 4 A 26quot US119 Tag I l a El Interest I Pmpf l Long E Healch amp E 1393 1 0 Tax Tenn Welfare Debt 1 3955 13 97139 51 The city of Gulfport has several areas where they receive their money These areas as shown in the pie charts are mainly from the property taxes sales taxes grants and other charges for services and fees The City39s revenues exceeded expenses by 49 million for the year 2011 Department of Finance and Administration 2011 As shown the differences between government accounting and forpro t accounting are very different as what their missions are how they are presented and who they are presented too But the CAFR does help bring everything together for government accounting so that they anyone can view the expenses revenues and any other nancial part of the statement and know where money is being used and what it is being used for Speci cally the MDampA section that breaks everything down to easy terms where anyone can understand the statements With a CAFR anyone in a particular city should be able to know where their money is being spent and if it is being spent wisely 7 I Comprehensive Reporting References Copley PA 2011 Essentials of Accounting for Governmental and Notforprofit Organizations 10th ed Retrieved from The University of Phoenix eBook Collection Database Department of Finance and Administration 2011 CAF R City of Gul yort Retrieved from httpWWWgulfportmsgovFinanceCAFRZOI 1pdf 8 Comprehensive Reporting
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