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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 14 – Adjustments to Beginning Net position, Fund Balances or Fund Net Position
Changes To or Within the Financial Reporting Agency

GASBA 100 gives new guidance for changes within the financial reporting agency. GASB 62 only addressed changes to the financial reporting agency.

The new guidance states:

  • Changes to the reporting agency typically result in the addition or removal of component unit(s).
  • Changes within the reporting agency usually result from:
    • Movement of funds from major or non-major.
    • Reclassification of a fund from a major enterprise fund to a major special revenue fund.
    • Changes in a component unit’s presentation as blended or discretely presented.
    • Addition or removal of a fund that results from the movement of continuing operations within the primary government, including its blended units.
    • An addition or removal of a component unit of the reporting agency.

      Note: Acquisitions, mergers, or transfers of operations (as defined by GASB 69) that result in the addition or removal of a discretely presented component unit and component units reported pursuant to GASB 90 are not considered to be changes to or within the financial reporting agency.

Transactions or other events that could be classified as either a change in accounting principle or a change to or within the financial reporting agency must be considered as a change to or within the financial reporting agency.

Reporting

Report changes to or within the financial reporting agency by adjusting beginning net position, fund balance or fund net position (as applicable) for the effect of the change — as if the change occurred at the beginning of the reporting period only (not all periods presented). This may result in an awkward presentation during the period that a fund moves from major to non-major (due to the requirements to show the beginning fund balance as previously stated.)

Note: When making changes to Required Supplementary Information (RSI), including Management’’s Discussion & Analysis (MD&A), or Supplementary Information (SI), agencies must restate all reporting periods presented in the basic financial statements. Agencies must not make changes to the RSI or SI presented for reporting periods prior to those presented in the basic financial statements. The MD&A must reference the related footnote disclosure.

Disclosure

In the financial statement notes, agencies must disclose the nature of and reason for each change to or within the financial reporting agency (except for changes in fund presentation for meeting/not meeting quantitative thresholds for major fund). Agencies must also disclose the effects on beginning net position, fund balance, or fund net position (as applicable).