Kế toán, kiểm toán - Chapter 9: Accounting for special purpose entities, including public colleges and universities

Essentials of Accounting for Governmental and Not-for-Profit OrganizationsChapter 9Accounting for Special Purpose Entities, Including Public Colleges and UniversitiesCopyright © 2015 McGraw-Hill Education. All rights reserved.Chapter 9 – Learning ObjectivesIdentify the required financial statements of varying types of special-purpose entitiesPrepare combined fund-basis/government-wide financial statements for a special purpose entity engaged in a single governmental activityApply the accrual basis of accounting in the recording of typical transactions of a public college or universityPrepare the financial statements of a public college or universitySpecial Purpose EntitiesGeneral Purpose Governments include: States, counties, cities, towns, and villages.Special Purpose Entities include: Fire protection districts, park districts, public colleges and public authorities.A Special Purpose Entity may be a component unit of a General Purpose government.Special Purpose Entity ReportingIf the entity is engaged in governmental and business type activitiesUse general GASB 34 reporting model (chapters 3-8) and report both fund basis and government-wide financial statementsIf the entity is engaged in multiple governmental activitiesUse general GASB 34 model, just omit enterprise funds statements which are not applicable. Again, report both fund basis and government-wide financial statementsSpecial Purpose Entity ReportingIf the entity is engaged in single governmental activityThe entity can prepare governmental fund, government-wide statements, and reconciliation effects all on one combined statementIf the entity is engaged only in business-type activitiesThe entity can prepare enterprise fund financial statements (no need for government-wide)If the entity is engaged only in fiduciary type activitiesThe entity can prepare fiduciary fund financial statements (no need for government-wide) General Fund Capital Projects FundTotal Governmental FundsAdjustments to Government-wideStatement of Net Position Assets      Cash $ 1,500,000 $ 4,800,500 $ 6,300,500   $ 6,300,500 Investments 500,000 500,000   500,000 Taxes Receivable - Gross 200,000 200,000   200,000 Interest Receivable 5,000 5,000   5,000 Prepaid Items 12,000 12,000   12,000 Capital Assets - 35,000,000 35,000,000 Accumulated Depreciation - (7,500,000) (7,500,000) Total Assets $ 2,217,000 $ 4,800,500 $ 7,017,500 $ 27,500,000 $ 34,517,500 Liabilities and Fund Balances  Liabilities Accounts Payable 840,000 62,500 902,500   902,500 Accrued Liabilities 250,000 250,000   250,000 Deferred Property Taxes 65,000 65,000 (65,000) - Contracts payable - Retained % 700,000 700,000   700,000 Long-term Notes Payable - 15,000,000 15,000,000 Total Liabilities 1,155,000 762,500 1,917,500 14,935,000 16,852,500 Fund Balances Nonspendable 12,000 12,000  Assigned -   Capital projects 58,000 4,038,000 4,096,000  Unassigned 992,000 992,000   Total Fund Balances 1,062,000 4,038,000 5,100,000      Net Position  Net Investment in capital assets   11,800,000 Unrestricted  5,865,000   $ 17,665,000 Example – Combined Balance Sheet, Statement of Net PositionAdjustments to convert to accrualPUBLIC Colleges and UniversitiesPublic Colleges and Universities are owned by a government – typically a state government. Public College financial reporting is covered by GASB.Private Colleges are not owned by a government and their reporting falls under FASB guidance -- covered in chapter 11. Although there are more private than public colleges in the US, roughly 3/4 of the students attend public institutions.Public Colleges and Universities – GASB 35 GASB 35 requires statements similar to those of special purpose governments under GASB 34.The effect is to require colleges to use the accrual basis and record long-term assets, including infrastructure, along with depreciation.Public College Financial ReportsMost public colleges, will report as governmental units with “business activities only”.Therefore they will prepare enterprise fund statementsException: some community colleges that have power to levy property taxes, and may prepare both fund level and government-wide statementsPublic College Statement of Net PositionAssets and LiabilitiesAre classified as current and noncurrent.Net Position Is Classified as 1) Net Investment in capital assets2) Restricted -- Nonexpendable and Expendable3) UnrestrictedUnrestricted Net Position DeficitsNote: A deficit balance in unrestricted net position is common because:Colleges are not accustomed to setting aside funds for depreciation. States seldom fund compensated absences in advance.Public College Statement of Revenues, Expenses and Changes in Net PositionFormat: Operating Revenues include: Student Tuition net of scholarship allowances Federal and State Grants AuxiliaryLess: Operating Expenses including depreciationPlus or minus: Nonoperating Revenues and Expenses Includes state appropriations, gifts, investment income, interest on capital debtPlus or minus: Capital appropriations, gift, endowment additionsEquals: Increase in net positionPlus: Beginning net positionEquals: Ending net positionPublic College Statement of Cash FlowsGASB FormatCash flows from Operating activities must be presented using the direct methodFour Parts (described on next slide)Reconciliation of Operating income to cash flows from operationsMay also have noncash financing and investing sectionPublic College Statement of Cash FlowsGASB FormatClassification of Cash Flows – GASB FormatOperating items: Excludes interest and dividend revenues and expensesNoncapital Financing: Includes state appropriations and gifts including endowmentsCapital Financing: Purchase of long-term assets and related gifts, appropriations and debt repayment including interestInvesting: Includes interest revenues, endowment and other investments kept separateTuition discounts and financial aidIf tuition or fees are waived for scholarships where no service is expected of the student, the scholarship should be reported as a contra revenue.If tuition or fees are waived for work-study or graduate assistantships where the student is expected to work, the scholarship should be reported as an expense.