Horngren's Cost Accounting: A Managerial Emphasis
16th EditionMadhav V Rajan, Srikant M. Datar
1,008 solutions
Cost Accounting: A Managerial Emphasis
15th EditionCharles T. Horngren, Madhav V Rajan, Srikant M. Datar
853 solutions
Horngren's Cost Accounting: A Managerial Emphasis
16th EditionMadhav V Rajan, Srikant M. Datar
1,008 solutions
Financial Accounting
9th EditionCharles T. Horngren
1,286 solutions
- SAM
- TOC
- 7400
- 7430
[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:
- 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.
- Does not report long-term capital assets and long-term obligations.
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:
- Measures all current and noncurrent assets.
- Measures all short and long-term liabilities.
- Records depreciation/amortization as a cost of operations.
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Chapter 4: Governmental Accounting — Measurement Focus and Basis of Accounting
Traditionally, 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.