Statement of Activities (4)
Revenue presentation. Revenues on the statement of activities are distinguished between program revenues and general revenues.
A government’s statement of activities may report extraordinary and special items. Extraordinary items are those that are unusual in nature and infrequent in occurrence. This tracks the private sector accounting definition of this term.
Special items are a new concept introduced by GASBS 34. They are defined as “significant transactions or other events within the control of management that are either unusual in nature or infrequent in occurrence.” Special items are reported separately in the statement of activities before any extraordinary
items.
Certainly understanding the statement of activities is far more difficult than understanding the statement of net assets. While GASBS 34 introduced kind of an upside-down format for this statement and created a host of rules and regulations that are summarized above, the important thing is to not get lost in the
details and to understand what the statement is trying to present.
To accomplish this, the statement of activities presents the following information. First, start with the direct expense of a government’s major programs (public safety, transportation,health, education, parks, general government, etc.) and certain expenses that do not relate to programs, specifically interest expense on long-term debt. Reduce those expenses by revenues that are brought in by each of those programs. This represents the net cost to the government for each of these programs and the nonprogram expenses. The difference between this amount and the general revenues of the government (all of its tax revenue
as well as other revenues not related to specific programs) represents the change in the net assets of the government. (This change may also be affected by extraordinary items and special items, as well as transfers with the discretely presented component units.)
Taken From : Governmental Accounting Made Easy