GASB Sttatementt No. 54 FFund Balaance Reporting an
nd Govern
nmental Fund Type Definitio
ons Efffective with
h the FYE 6/3
30/2011, go
overnmental entities willl need to implement GA
ASB Statement No. 54, Fu
und Balancee, Reporting and Govern
nmental Fun
nd Type Deffinitions. GA
ASB 54 chan
nges the terrminology an
nd definition
n of the fund balance descriptions aand the criteeria for the use of goveernmental fu
und types. Th
he new stan
ndard applie
es to govern
nmental fun
nds such as the generaal fund, speccial revenuees, capital projects and debt service. GASB 54
4 does not apply a
to pro
oprietary fu
und types (eenterprise o
or internal seervice funds). A summarry of the new
w fund balan
nce terminollogy comparred with thee old is as follows: Old 1. Reservved for Prepaaid Expenditures, Inventtories, Encumbrances, Advvances to
Other Funds, etc. 2. Reservved for Grantts, Projects, ettc. 3. Unrese
erved – Desiggnations for p
projects. 4. Unrese
erved – Unde
esignated New
Non‐Spen
ndable for: Prepaid Expenditures, Inventori es, Encumbraances, Advances to Other Funnds, etc. Restricted
ditors, or grantors. d by law, cred
Committeed by governing body onlyy. Assigned by intent & ccan be redeployed by ment, or goveerning body. managem
Unassign ed is the residual of the geeneral fund only. N
Non‐Spendab
ble cannot b
be used in caash, or is leggally or conttractually req
quired. Resstricted is im
mposed by laaw, creditorss, grantors o
or other external legal rrestriction (C
CDBG, statee street aid, solid waste and drug co
ontrol fundss, as examp
ples). Committed is self‐imposed legal limitaation (the m
majority of the fund balances of sp
pecial reven
nue, capital p
projects and debt servic e fund balan
nces) by the governing b
board and caannot be use
ed for any other purpose unless formal action iss approved b
by the governing body. Assigned iss limited to intent, but ccan be rede
eployed by m
management or governiing body (th
his would reeplace the old internal d
designations of fund balaances). Th
he new stan
ndard will require local ggovernments to close annd combine some special revenue ffunds into th
he general fu
und since sp
pecial revenu
ue funds will now be reqquired to haave a specificc revenue so
ource that iss externally restricted by b law, grantors, or creditors, or haas been com
mmitted by the govern
ning body. Th
his will required governmental entitties to re‐evaluate the nneed for the number of sspecial reven
nue funds fo
or FY 2011. 315 No
orth Cedar Blu
uff Road, Knoxxville, TN 379
923
Telephone: (865) 769--0660
www.pu
ughcompany.ccom
he financial reporting fo
or FY 2011 w
will require aa modificatioon to the Su
ummary of SSignificant Accounting Th
Po
olicies to de
escribe the new fund balance defin
nitions. Sincce the adop
ption of GASSB 54 is con
nsidered a ch
hange in acccounting principle (ASC 250‐10), the
en if the govvernmental entity closees, or combines some sp
pecial revenue funds intto the generral fund, then a note dis closure will be required
d to describee the prior period adjusttments (Julyy 1, 2010) to
o the general fund balaance and sp
pecial revenu
ue fund balance that w
were closed. In
n addition, please p
see our o PowerPo
oint presentation slides regarding tthe adoption
n of GASB SStatement N
No. 54 at http
p://www.pughcompany.com/tools_
_resources/ppresentation
ns_materialss.aspx. Please contacct our office if you have any questions about GA
ASB Statemeent No. 54 att 865‐769‐06
660. 315 No
orth Cedar Blu
uff Road, Knoxxville, TN 379
923
Telephone: (865) 769--0660
www.pu
ughcompany.ccom