Wiley GAAP for Governments 2013: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments

CHAPTER 4

GENERAL FUND AND SPECIAL REVENUE FUNDS

Introduction

Basis of Accounting and Measurement Focus

Nature and Use of the General Fund

Nature and Use of Special Revenue Funds

Accounting for Certain Revenue and Expenditures of General and Special Revenue Funds

Special program considerations—Food stamps

Special program considerations—On-behalf payments for fringe benefits and salaries

Special Considerations—Component Units

Special Assessments

Miscellaneous Revenues

Expenditures

Accounting for Assets, Liabilities, and Fund Balances of General and Special Revenue Funds

Inventories and Prepaids

Fund Balances

Summary

INTRODUCTION

The general fund and special revenue funds are distinct. This chapter examines them together because many of the accounting and reporting aspects of these two fund types are the same. The financial reporting of a general fund is often used as an important indication of a government’s financial performance. When a state or municipality reports that it has a “surplus” or a “deficit” what it is often referring to is the financial performance reported by the general fund. To enable the financial statement preparer to understand how and when these funds should be used, this chapter examines the following topics:

• Basis of accounting and measurement focus
• Nature and use of the general fund
• Nature and use of special revenue funds
• Accounting for certain revenues and expenditures of general and special revenue funds
• Accounting for assets, liabilities, and fund balances ...