Government wide statements and Fund statements

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GOVERNMENT–WIDE STATEMENTS AND FUND STATEMENTS1Government wide statements and Fund statementsFollowing the American Psychological Association’s GuidelinesStudent NameUniversity NameIn your analysis of government-wide and fund statements, explain the distinction between thesetwo types of financial statements in governmental accounting. How do they differ in terms oftheir purpose, reporting approach, and the audience they serve? Discuss the significance ofGASB No. 34 in shaping the current reporting model and the challenges faced by governments indistinguishing between internal and external users. Use at least 750 words to support youranswer.

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GOVERNMENT–WIDE STATEMENTS AND FUND STATEMENTS2Capital leases not subject to debt limitationsAsper GASB, Capital Leases are treated as a purchase oflong term asset from a long term debtobligation. However, the court does consider the governmental enterprises, who themselves donot have power to borrow but immediately need to purchase capital equipment.As suchthegovernmentalenterprise buys the asset on capital lease, but the obligation is subject to theappropriations being made by the legislature. To justify the instance of non-appropriation, thegovernment needs to certify non-availability of funds and that best efforts are made to procurethe same by arequisition being made in its budget, which is termed as non-appropriation clausein the operation of a capital lease.Thus in such cases, capital leases are not subject to debtlimitationsas per many jurisdictions.Journal Entries recorded in Government wide statements and Fund statementsFund statementsGovernment wide statements1)CashDr$20000000CashDr$20000000ToOther Finance Source$20000000To BondPayable$20000000(Capital Project Fund)2) ExpenditureDr$20000000BuildingDr$20000000To Cash$20000000ToCash$200000003) No Depreciation is recordedDepreciation Expense Dr$300000ToAccumulated Dep$300000

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