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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 26 – Segment Information

Agencies reporting enterprise funds (a type of proprietary fund) or using enterprise fund accounting and reporting standards to report their activities could be required to present segment information for those activities in the notes to the financial statements. According to GASB 34, paragraph 122, as amended by GASB 37, paragraph 17, a segment is an identifiable activity (or group of activities), reported as or within an enterprise fund or another stand-alone entity that has one or more bonds or other debt instruments (such as certificates of participation) outstanding, with a revenue stream pledged in support of that debt. In addition, the activity’s revenues, expenses, gains, losses, assets and liabilities are required to be accounted for separately. (The requirement for separate accounting should be imposed by an external party.)

Segment disclosure is not required for an activity whose only outstanding debt is conduit debt for which the government has no obligation beyond the resources provided by related leases or loans. In addition, segment reporting is not required if an individual fund is reported as both a segment and a major fund.

The decision to provide segment disclosures about component units that use enterprise fund accounting should be based on the individual component unit’s significance to the total of all discretely presented component units and that component unit’s relationship with the primary government.

The Comptroller’s office and State Auditor’s Office can assist agencies in determining what should be reported as a segment. Contact your financial reporting analyst if you have any questions.

For segment note disclosure requirements, see GASB 34, GASB 37 and GASB 63.

Submit a copy of the agency’s Note 26 from its published AFR through the ONDSS web application. The required format is a Microsoft Word document (latest version: docx) with header information that includes: agency name/number and note number/name. If Note 26 contains a table, include the table in the Word document — rather than as a separate Excel document or other database application file. If Note 26 does not apply, do NOT submit a note to indicate “not applicable.”