What is the difference between the economic resources measurement focus and the current financial resources measurement focus?
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(New: 04/2020) A fund’s measurement focus relates to what is being measured or the transactions and events that will be shown in the fund’s accounting record and reported in its financial statement. The common measurement focuses are discussed below: Current Financial Resources Measurement Focus Governmental type funds use the current financial measurement focus to report activities. This measurement focus has the following features:
Economic Resources Measurement Focus Proprietary and fiduciary type funds use the economic resources measurement focus to report financial activities. This measurement focus has the following features:
RevisionsNo Revisions for this item. Search Entire ManualPrint Entire SAM ManualPlease bear with us, generating the entire SAM for printing will take approximately two minutes. Chapter 4: Governmental Accounting — Measurement Focus and Basis of AccountingTraditionally, the majority of governmental financial information has been maintained and reported in fund financial statements on the modified accrual basis of accounting (or the accrual basis for business-type activities). GASB Statement 34 established additional reporting (the government-wide statements) that represents a major shift in the focus and content of governmental financial statements. Collecting and reporting the additional financial information required by the government-wide statements adds to the complexity of financial reporting activities and has significant implications for the traditional focus and basis of accounting used in governmental financial statements. The government-wide financial statements consist of a statement of net assets and a statement of activities and are prepared using the economic resources measurement focus and the accrual basis of accounting. Thus, revenues are recognized in the accounting period in which they are earned and become measurable without regard to availability, and expenses are recognized in the period incurred, if measurable. Governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized in the accounting period in which they become available and measurable, and expenditures are recognized in the period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt, which should be recognized when due (GASB 2005a). Proprietary fund financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Like proprietary fund financial statements, fiduciary fund financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. Exhibit 1 summarizes the measurement focus and basis of accounting for each reporting element and type of fund. GASB Statement 20, as amended by Statement 34, allows a government the option of applying FASB Statements and Interpretations issued after November 30, 1989—except for those that conflict with or contradict GASB pronouncements—to enterprise funds and government-wide financial statements. The election is made on a fund-by-fund basis; however, consistency in the application within a particular fund is encouraged. What is the difference between economic and current financial resources measurement focuses?The economic resources measurement focus measures all economic resources, including fixed assets and long-term debt. The current financial resources measurement focus measures primarily financial resources and does not measure long-term assets and liabilities.
What is current financial resources measurement focus?Current Financial Resources Measurement Focus
Measures cash or assets that are expected to be converted to cash within or shortly after the accounting period. Measures whether the financial resources obtained during the accounting period are sufficient to cover claims against the fund during that period.
What is the difference between a measurement focus and basis accounting?The accounting basis determines when the economic consequences of transactions and events are reflected in financial statements. Unlike the selection of an accounting basis, which is concerned with the timing of transactions and events, a measurement focus identifies what transactions and events should be recorded.
What is the measurement focus and the basis of accounting for the government wide financial statements?Government Wide Financial Statements : Example Question #4
Which basis of accounting is required for a city's government wide financial statements? Explanation: The government wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting.
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