This chapter focuses on some of the underlying accounting principles and concepts that underlie all governmental accounting and financial reporting. In order to understand governmental financial statements, the reader needs to understand these basic concepts. Specifically, this chapter addresses the following areas:

• Understanding the different bases of accounting
• Understanding what measurement focuses are used by governments
• Defining and understanding the nature of assets
• Defining and understanding the nature of liabilities
• Defining and understanding the nature of net assets

In reading this chapter, keep in mind that a government reports different types of financial information within different types of specific financial statements that are discussed later in this book. For example, a government’s “fund” financial statements will report fund balances while its “government-wide” financial statements will report net assets. Both represent the difference between the assets and liabilities presented on each financial statement. The important point of this chapter is to obtain an overview of many concepts and then see how they get sorted out into various types of financial statements in later chapters.

Taken From : Governmental Accounting Made Easy

This entry was posted on Tuesday, January 6th, 2009 at 6:48 am and is filed under General. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.