In some cases, the component units that are to be blended with the primary government have funds of different fund types. For example, a component unit may have a general fund and a capital projects fund. If they meet the definition of major funds, they would be reported as such. If they are nonmajor funds, they would be blended with those of the primary government by including them in the appropriate nonmajor fund combining statements of the primary government. In addition, since the
primary government’s general fund is usually the main operating fund of the reporting entity and is a focal point for users of the financial statements, the primary government’s general fund should be the only general fund for the reporting entity. The general fund of a blended component unit should be reported as a special revenue fund.

Reporting Discretely Presented Component Units
GASBS 34’s requirement for presenting information about discretely presented component units can best be described by the term “overview.” (Note that this discussion does not apply to blended component units, which are presented as if part of the primary government, and component units that are fiduciary in nature, which are included only in the fund financial statements with the primary government’s fiduciary funds.)

Taken From : Governmental Accounting Made Easy

This entry was posted on Friday, June 26th, 2009 at 8:02 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.