additions, deductions, and depreciation charged in the current period—to reconcile to the ending balance. A schedule is also required for general long-term debt to give information on beginning balances, new debt issued, debt principal retired, and ending balances.

♦ As indicated in Chapter 16, all interfund activity will be classified as either reciprocal or non-reciprocal. Reciprocal interfund activities include (1) interfund loans, which are treated as due to/from (short-term) or advances to/from (long-term), and (2) interfund services between governmental and proprietary funds that are reported as revenue and expenditures/expenses. Non-reciprocal interfund activities include (1) interfund transfers and (2) interfund reimbursements. One significant change made in GASB No. 34 is the elimination of the distinction between operating transfers and residual equity transfers. Under the new standard, all transfers will be reported in the government funds as "other financing sources or uses." And, in the proprietary funds, all transfers will be reported simply as "transfers." Payments in lieu of taxes will be classified as transfers. Extensive footnotes are required to provide users of the financial statements detailed information about the purpose and nature of these transfers and the funds affected.

♦ Special and extraordinary items will be reported separately in both the governmental and proprietary fund financial statements. Extraordinary items are defined as in business accounting— both unusual in nature and infrequent in occurrence. Special items are defined as arising

Illustration 17-10 City of Berryville Statement of Changes in Fiduciary Net Assets Fiduciary Funds December 31, 20X2

Employee Private-Retirement Purpose



Investment earnings:

Net (decreased) in fair value of investments $ (11,500) $ —

Interest 95,000 4,500

Total investment earnings $153,500 $ 4,500

Less investment expense 15,000 —

Net investment earnings $138,500 $4,500

Total additions $229,500 $ 4,500


Refunds of contribution 46,000 —

Administrative expenses 9,000 700

Total deductions $ 79,500 $ 4,500

Net assets—beginning of the year 61,000 80,000

Net assets—end of the year $211,000 $80,000

Source: Adapted from GASB 34, Appendix C.

from significant transactions or other events that are (1) within the control of management and (2) either unusual in nature or infrequent in occurrence. Special items are to be reported separately and before extraordinary items, if any. Governments must also disclose in the notes to the financial statements any significant transactions or other events that are either unusual or infrequent but not within the control of management.

♦ Budgetary comparisons in either a separate statement or schedule as part of the integrated set of basic financial statements or as required supplementary information (RSI) are required. Further, there is a new requirement to include a column for the original budget as well as the final revised budget column. The final budget is used to compare with actual amounts using the government's budgetary basis to determine compliance with the legally adopted budget. Budgetary comparisons are required for the general fund and for each annually budgeted major special revenue fund. Illustration 17-12 shows a budgetary comparison schedule suggested by the GASB in Statement No. 34. No budgetary comparisons are required in the basic financial statements or RSI for any capital project, debt service, or permanent funds.

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