Which Of The Following Resource Inflows Would Be Recorded As A Revenue Of A Debt Service Fund?

3.1 Accounting

3.i Accounting Principles and Internal Controls

three.1.1 Fund Types and Accounting Principles

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three.1.1.20 Bookkeeping and reporting capabilities

3.1.i.30 Fund accounting systems

3.1.1.xl Types of funds

Governmental funds

Code 000 - General (Current Expense) Fund

Code 100 - Special Revenue Funds

Lawmaking 200 - Debt Services Funds

Code 300 - Capital Projects Funds

Code 700 - Permanent Funds

Proprietary funds

Code 400 - Enterprise Funds

Code 500 - Internal Service Funds

Fiduciary funds

Code 600 - Fiduciary Funds

Codes 600-609 - Investment Trust Funds

Codes 610-619 - Alimony (and Other Employee Benefit) Trust Funds

Codes 620-629 - Private-Purpose Trust Funds

Codes 630-698 - Custodial Funds

Code 699 - External Investment Pool Fund

3.1.1.fifty Number of funds

three.ane.1.60 Reporting capital assets

3.1.1.90 Reporting long-term liabilities

3.1.1.100 Authorities-wide financial statements

3.one.1.110 Fund financial statements

3.1.1.120 Budgeting, budgetary control and budgetary reporting

3.1.1.130 Transfer, revenue, expenditure and expense classifications

three.ane.one.140 Common terminology and classifications

3.one.i.150 Almanac financial reports

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three.1.one.10 The following principles of accounting and financial reporting are based on those set forth in the Governmental Accounting Standards Board's (GASB) Codification of Governmental Bookkeeping and Financial Reporting Standards. The Confined manual permits accounting and financial reporting that conforms to these principles in all respects and requires GAAP municipalities to business relationship and study in conformity with these principles, except that the annual report required is not as extensive as the Annual Comprehensive Financial Report (ACFR).

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3.1.1.20 Accounting and reporting capabilities

A governmental accounting system must make information technology possible both: (a) to present adequately and with full disclosure the funds and activities at the regime in conformity with generally accepted accounting principles; and (b) to decide and demonstrate compliance with finance-related legal and contractual provisions.

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3.1.one.thirty Fund accounting systems

A governmental accounting system should be organized and operated on a fund basis. A fund is defined as a fiscal and accounting entity with a self-balancing fix of accounts recording cash and other financial resources, together with all related liabilities and residuum equities or balances, and changes therein, which are segregated for the purpose of carrying on specific activities or attaining certain objectives in accord with special regulations, restrictions, or limitations. Fund financial statements should be used to report detailed information about primary authorities, including its blended component units. The focus of governmental and proprietary fund financial statements is on major funds.

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iii.i.1.40 Types of funds

In fund fiscal statements, governments should study governmental, proprietary, and fiduciary funds to the extent that they take activities that see the criteria for using these funds.

Presented below is a system to classify all funds used past local government and the assignment of code numbers to identify each type of fund. A three digit code is used: the beginning digit identifies the fund type and the adjacent two digits will exist assigned by the governmental unit to identify each specific fund.

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Governmental funds

Code 000 - General (Current Expense) Fund – should be used to account for and report all financial resources non accounted for and reported in another fund.

Although a local government has to study simply one general fund in its external financial reports, the government can take multiple full general subfunds for its internal managerial purposes. These managerial subfunds have to be combined into one general fund for external financial reporting.

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Code 100 - Special Revenue Funds – should be used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditure for specific purposes other than debt service or capital projects. Restricted revenues are resources externally restricted by creditors, grantors, contributors or laws or regulations of other governments or restricted past law through constitutional provisions or enabling legislation (similar to restricted component of net position used in government-wide reporting). Committed revenues are resource with limitations imposed by the highest level of the government, and where the limitations tin can be removed only by a similar action of the same governing body. Revenues do not include other financing sources (long-term debt, transfers, etc.).

The term gain of specific revenue sources establishes that one or more specific restricted or committed revenues should exist foundation for a special revenue fund. They should be expected to continue to comprise a substantial portion of the inflows reported in the fund. While GASB Statement 54 has not provided a numeric range for substantial portion of inflows, it was recommended that at least 20 percent is a reasonable limit for reporting a special revenue fund. Local governments need to consider factors such as past resources history, time to come resource expectations and unusual current year inflows such as debt proceeds in their analysis.

They may utilise the adding below to determine whether an activeness would qualify for reporting as a special revenue fund.

Other resources (investment earnings and transfers from other funds, etc.) also may exist reported in the fund if these resources are restricted, committed, or assigned to the specific purpose of the fund.

Governments should discontinue reporting a special acquirement fund, and instead report the fund's remaining resources in the general fund, if the government no longer expects that a substantial portion of the inflows volition derive from restricted or committed revenue sources.

The Statement requires all revenue to be recognized in the special acquirement fund. If the resource are initially received in some other fund, such as the full general fund, and subsequently remitted to a special revenue fund, they should non exist recognized every bit revenue in the fund initially receiving them. They should be recognized equally revenue in the special revenue fund from which they will exist expended. So, the local governments can either receive resources directly into the special revenue fund, or account for the resources equally agency deposits in the receiving fund and, afterwards remitting them, recognize them as revenue to the special revenue fund.

Special acquirement funds should not exist used to account for resources held in trust for individuals, private organizations, or other governments.

The general fund of a blended component unit should exist reported as a special revenue fund.

The state statutes contain many requirements for special funds to account for different activities. The legally required funds do not ever encounter GAAP standards for external reporting. Then, while the local governments are required to follow their legal requirements, they will accept to make some adjustment to their fund structure for external financial reporting.

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Code 200 - Debt Service Funds – should be used to account for and report fiscal resources that are restricted, committed, or assigned to expenditure for primary and interest. Debt service funds should be used to written report resources if legally mandated. Financial resources that are existence accumulated for primary and involvement maturing in future years as well should exist reported in debt service funds. The debt service transactions for a special cess for which the government is not obligated in whatever matter should be reported in an bureau fund. Also, if the government is authorized, or required to establish and maintain a special assessment bond reserve, guaranty, or sinking fund, GASB Argument 6 requires using a debt service fund for this purpose.

Annotation: Debt service funds should non exist used in proprietary funds (400 and 500). Utilise enterprise funds (400) or internal service (500) for debt payments related to utilities and other business blazon activities.

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Code 300 - Upper-case letter Projects Funds – should be used to business relationship for and report financial resources that are restricted, committed, or assigned to expenditure for uppercase outlays including the acquisition or construction of upper-case letter facilities or other majuscule assets. Capital letter outlays financed from general obligation bond proceeds should be accounted for through a capital projects fund. Upper-case letter projection funds exclude those types of capital-related outflows financed past proprietary funds or for assets that will exist held in trust for individuals, individual organizations, or other governments (private-purpose trust funds).

Note: Capital project funds should non be used in proprietary funds (400 and 500). Use enterprise funds (400) or internal service (500) for capital payments related to utilities and other business type activities.

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Code 700 - Permanent Funds – should be used to account for and report resource that are restricted to the extent that but earnings, and non principal, may be used for purposes that support the reporting government's programs – that is for the benefit of the government or its citizens (public-purpose). Permanent funds do non include private-purpose trust funds which account for resource held in trust for individuals, private organizations, or other governments.

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Proprietary funds

Code 400 - Enterprise Funds - may be used to report any activity for which a fee is charged to external users for appurtenances or services. Enterprise funds are required for any activeness whose principal revenue sources encounter whatever of the following criteria:

• Debt backed solely by a pledge of the net revenues from fees and charges.
• Legal requirement to recover toll. An enterprise fund is required to be used if the cost of providing services for an action including capital costs (such as depreciation or debt service) must be legally recovered through fees or charges.
• Policy decision to recover cost. It is necessary to use an enterprise fund if the regime's policy is to establish activity fees or charges designed to recover the price, including majuscule costs (such every bit depreciation or debt service).

These criteria should be applied in the context of the activity's principal acquirement source.

The term activity generally refers to programs and services. This term is not synonymous with fund. As a practical consequence, if an activity reported as a separate fund meets any of the 3 criteria, information technology should exist an enterprise fund. Also, if a "multiple activity" fund (eastward.m., general fund) includes a meaning activeness whose main revenue source meets any of these three criteria, the activeness should be reclassified as an enterprise fund.

The determination of an activeness'southward principal revenue source is a thing of professional person sentence. A skillful indicator of the activity'due south significance may be comparison pledged revenues or fees and charges to total revenue. For example, consider a county accountant's office that charges fees to provide a payroll service to various taxing districts. Even if the fee is meant to comprehend the cost of the service, the county accountant function as a whole is primarily supported with tax dollars from the general fund. It would be allowable in this case to leave the activeness all within general fund.

Finding an appropriate fund type requires a careful assay since in that location is not always a clear option. For example, edifice let fees may be accounted for in the full general fund or a special revenue fund in sure circumstances, such equally when they are partially supported by taxes. However, if in that location is a pricing policy to recover the toll of issuing those individual building permits, they should be reported in an enterprise fund.

In addition, GAAP mandate the utilize of enterprise funds for the separately issued fiscal statement of public-entity take a chance pools. Public-entity take a chance pools also are accounted for equally enterprise funds when they are included within a sponsoring government's report, provided the sponsor is non the predominant participant in the system. Otherwise, they can apply the general fund.

Separate funds should non exist reported for bond redemption, structure, reserves, or deposits, for any utility that is accounted for on the total accrual basis, using either the Confined accounts or a nationally recognized utility nautical chart of accounts such as FERC or NARUC. Separate funds should not be reported fifty-fifty though bail covenants may stipulate a bond reserve fund, bond construction fund, etc. The bond covenant use of the term fund is not the same every bit the apply in governmental accounting. For bond covenants, fund ways only a segregation or separate account, not a self-balancing set of accounts. (See account 150 in the full general ledger chart of accounts.)

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Code 500 - Internal Service Funds – may be used to study any activeness that provides appurtenances or services to other funds, departments or agencies of the government, or to other governments, on a cost-reimbursement basis. Internal service funds should be used merely if the reporting regime is the predominant participant in the activity. Otherwise, the activity should exist reported in an enterprise fund. For more data on bookkeeping for these funds come across 3.9.6 and for reporting see 4.3.half-dozen.

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Fiduciary funds

Code 600 - Fiduciary Funds – should be used to account for assets, including capital assets (GASB 34, Paragraph 106), held past a regime in a trustee capacity or as a custodian for individuals, private organizations, other governmental units, and/or other funds. These include (a) investment trust funds, (b) pension (and other employee benefit) trust funds, (c) individual-purpose trust funds, and (d) custodial funds.

For more than data on determining if a transaction is fiduciary please run across the Determining Fiduciary Custodial Activities folio.

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Codes 600-609 - Investment Trust Funds – should be used to report fiduciary activities from the external portion of investment pools and individual investment accounts that are held in a trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a beneficiary, (b) defended to providing benefits to recipients in accordance with the benefit terms, and (c) legally protected from the creditors of the government.

In addition to the trust criteria requirements above, all private investment accounts are required to be reported in an Investment Trust Fund.

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Codes 610-619 - Pension (and Other Employee Do good) Trust Funds – should exist used to report fiduciary activities for the following:

• Pension plans and OPEB plans that are administered through trusts that meet the criteria in paragraphs three of GASB Statement 67 or paragraph 3 of GASB Statement 74, respectively.
• Other employee benefit plans for which (1) resources are held in trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is not a casher, (b) dedicated to providing benefits to recipients in accordance with the do good terms, and (c) legally protected from the creditors of the government and (ii) contributions to the trust and earnings on these contributions are irrevocable.

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Codes 620-629 - Private-Purpose Trust Funds – should be used to report all fiduciary activities that (a) are not required to exist reported in pension (and other employee benefit) trust funds or investment trust funds, and (b) are held in a trust that meets the following criteria: the assets are (a) administered through a trust in which the government itself is non a beneficiary, (b) dedicated to providing benefits to recipients in accord with the benefit terms, and (c) legally protected from the creditors of the government.

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Code 630-698 - Custodial Funds – should be used to written report all fiduciary activities that are not required to exist reported in pension (and other employee benefit) trust funds, investment trust funds or private purpose trust funds. The external portion of the investment pools that are not held in trust that meets criteria listed in a higher place should be reported in a separate external investment pool fund column under the custodial funds classification.

Note: The custodial funds are required to be used by business-type activities and enterprise funds, except when the resources will normally exist held for less than ninety (90) days.

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Code 699 - External Investment Pool Fund – The external portion of the investment pools that are non held in trust and meet criteria listed above. Although this is considered a custodial fund, information technology should be reported in a split up external investment puddle fund cavalcade under the custodial funds classification.

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iii.1.1.l Number of funds

Governments should establish and maintain those funds required by law and sound financial administration. Only the minimum number of funds consistent with legal and operating requirements should be established. Using numerous funds results in inflexibility, undue complexity and inefficient financial administration.

Local governments should periodically undertake a comprehensive evaluation of their fund structure to ensure that individual funds that became superfluous are eliminated from accounting and reporting.

Elected officials should be educated to the fact that accountability may be achieved finer and efficiently by judicious use of section, program and other bachelor business relationship coding or cautious use of managerial (internal) funds.

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three.1.1.60 Reporting uppercase assets

A articulate stardom should be made betwixt general capital assets and capital assets of proprietary and fiduciary funds. Upper-case letter avails of proprietary funds should be reported in both the authorities-wide and fund financial statements. Capital assets of fiduciary funds should be reported only in the statement of fiduciary internet position. All other capital assets of the government are general uppercase avails. They should non be reported as assets in governmental funds only should be reported in the governmental activities cavalcade in the government-wide statement of cyberspace position. The Capital Assets (Bars 3.3.nine, 3.three.10 and 3.3.xi) sections of the BARS transmission provide additional information regarding accounting and reporting of capital assets.

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3.1.ane.ninety Reporting long-term liabilities

A clear distinction should be made between fund long-term liabilities and general long-term liabilities. Long-term liabilities straight related to and expected to be paid from proprietary funds should be reported in the proprietary fund statement of net position and in the government-broad statement of net position. Long-term liabilities straight related to and expected to be paid from fiduciary funds should be reported in the argument of fiduciary internet position. All other unmatured general long-term liabilities of the governmental unit should not be reported in governmental funds but should be reported in the governmental activities column in the government-wide statement of cyberspace position.

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Measurement focus and basis of bookkeeping in the basic financial statements

3.1.1.100 Government-broad financial statements

The regime-wide argument of net position and statement of activities should exist prepared using the economical resources measurement focus and the accrual footing of bookkeeping. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and commutation-like transactions should be recognized when the exchange takes identify. Revenues, expenses, assets, and liabilities resulting from nonexchange transactions should exist recognized in accordance with the GASB Statements 24 and 33.

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3.1.i.110 Fund fiscal statements

In fund financial statements, the modified accrual or accrual footing of bookkeeping, as advisable, should be used in measuring financial position and operating results.

a. Financial statements for governmental funds should exist presented using the electric current financial resources measurement focus and the modified accrual basis of accounting. Revenues should be recognized in the accounting menses in which they become available and measurable. Expenditures should be recognized in the bookkeeping period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term liabilities, which should be recognized when due.

b. Proprietary fund statements of cyberspace position and revenues, expenses, and changes in fund net position should exist presented using the economical resources measurement focus and the accrual ground of bookkeeping.

c. Financial statements of fiduciary funds should exist reported using the economic resources measurement focus and the accrual basis of bookkeeping, except for the recognition of certain liabilities of divers benefit alimony plans and certain postemployment healthcare plans.

d. Transfers should be reported in the accounting period in which the interfund receivable and payable ascend.

Annotation: The diverse fund types may be grouped in the following way to more clearly portray their relationship to an accounting basis:

Flow of Electric current Financial Resource Measurement Focus Funds – utilize the modified accrual basis:

000	General (Current Expense) Fund
100	Special Revenue Funds
200	Debt Service Funds
300	Uppercase Projects Funds
700	Permanent Funds

Flow of Economic Resources Measurement Focus Funds – use full-accrual basis:

400	Enterprise Funds
500	Internal Service Funds
600-609	Investment Trust Funds
610-619	Alimony (and Other Employee Benefit) Trust Funds
620-629	Private-Purpose Trust Funds
630-698	Custodial Funds
699	External Investment Pool Fund

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iii.i.one.120 Budgeting, budgetary control and budgetary reporting

a. An annual/biennial upkeep should be adopted by every authorities.

b. The accounting arrangement should provide the footing for appropriate budgetary control.

c. Budgetary comparing schedules should be presented as required supplementary information for the general fund and for each major special revenue fund that has a legally adopted annual/biennial upkeep. The budgetary comparison schedule should nowadays both (a) the original and (b) the last appropriated budgets for the reporting menstruation ad well equally (c) actual inflows, outflows, and balances, stated on the authorities'due south monetary basis.

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3.i.1.130 Transfer, revenue, expenditures and expense business relationship classifications

a. Transfers should exist classified separately from revenues and expenditures or expenses in the basic fiscal statements.

b. Gain of general long-term debt issues should exist classified separately from revenues and expenditures in the governmental fund financial statements.

c. Governmental fund revenues should be classified past fund and source. Expenditures should be classified by fund, function (or program), organization unit of measurement, activity, character, and principal classes of objects.

d. Proprietary fund revenues should be reported by major sources, and expenses should exist classified in substantially the same manner as those of similar business organization organizations, functions, or activities.

due east. At a minimum, the statement of activities should present:

(1) Activities accounted for in governmental funds by function, to coincide with the level of detail required in the governmental fund statement of revenues, expenditures, and changes in fund balances.

(two) Activities accounted for in enterprise funds by different identifiable activities.

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3.1.1.140 Common terminology and nomenclature

A common terminology and classification should exist used consistently throughout the budget, the accounts, and the financial reports of each fund.

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3.1.1.150 Annual fiscal reports

a. General purpose external financial reports should be prepared and published. Governments engaged in governmental and business organization-type activities should include, at a minimum:

(1)  Management'due south give-and-take and analysis (Medico&A).

(2)  Basic financial statements.  The basic financial statements should include:

(a) Government-wide financial statements.
(b) Fund financial statements.
(c) Notes to the fiscal statements.

(iii)   Required supplementary information (RSI) other than MD&A.

Governments engaged only in business-blazon activities should present only the fiscal statements required for proprietary funds.  They should include:

(1) Direction'southward word and analysis (MD&A)

(2) Proprietary fund financial statements consisting of:

(a) Statement of net position
(b) Statement of revenues, expenses, and changes in fund net position
(c) Argument of cash flows

(three) Notes to the financial statements

(4) Required supplementary data (RSI) other than Doc&A, if applicative.

b. The statements and reports listed above follow national standards  of fiscal reporting. They should non exist confused with legal reporting requirements , which are prescribed past the Land Auditor's Office for all local governments in Washington State. The legal requirements are consequent with these national standards, but they are not identical. Specific legal reporting requirements are contained in reporting part of this Transmission.

c. An ACFR may be prepared and published, roofing all activities of the primary regime (including its blended component units) and providing an overview of all discretely presented component units of the reporting entity including introductory section, management'due south give-and-take and analysis (MD&A), basic financial statements, required supplementary data other than MD&A, combining and individual fund statements, schedules, narrative explanations, and statistical section. The reporting entity is the primary government (including its blended component units) and all discretely presented component units.

d. The fiscal reporting entity consists of (one) the primary authorities, (2) organizations for which the primary government is financially answerable, and (3) other organizations for which the nature and significance of their relationship with the primary regime are such that exclusion would cause the reporting entity' bones financial statements to be misleading or incomplete. The reporting entity's authorities-broad fiscal statements should display information about the reporting government every bit a whole distinguishing between the full primary authorities and its discretely presented component units as well as betwixt the primary government's governmental and business-blazon activities. The reporting entity's fund financial statements should nowadays the primary government's (including its blended component units, which are, in substance, office of the master government) major funds individually and nonmajor funds in the aggregate. Funds and component units that are fiduciary in nature should be reported only in the statements of fiduciary net position and changes in fiduciary net position.

e. The nucleus of a fiscal reporting entity ordinarily is a primary government. However, a governmental organization other than a master government (such equally a component unit, joint venture, jointly governed organization, or other stand-alone regime) serves as the nucleus for its ain reporting entity when it issues divide fiscal statements. For all of these entities, the provisions the GASB Statement 14 should be applied in layersfrom the bottom up. At each layer, the definition and display provisions should be applied before the layer is included in the fiscal statements of the next level of the reporting government.

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This section was last edited by SAO on 01/06/22

Which Of The Following Resource Inflows Would Be Recorded As A Revenue Of A Debt Service Fund?,

Source: https://sao.wa.gov/bars_gaap/accounting/deferred-outflows-inflows-of-resources/

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