Wiley GAAP for Governments 2015: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments

659 Pages·2015·6.22 MB·English

by  Warren Ruppel

GAAP
for

Governments

2016
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GAAP
for

Governments

2016

Interpretation and Application of

GENERALLY ACCEPTED

ACCOUNTING PRINCIPLES

for State and Local Governments
Warren Ruppel
Th isedi tionfi rstpub lis hed2 016
2016JohnWiley&SonsLtd

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CONTENTS

Preface vii

AbouttheAuthor ix

1 NewDevelopments 1

2 FoundationsofGovernmentalAccounting 11

3 FundAccountingFundamentals 33

4 GeneralFundandSpecialRevenueFunds 53

5 CapitalProjectsFunds 65

6 DebtServiceFunds 77

7 ProprietaryFunds 85

8 FiduciaryFunds 97

9 FinancialStatementsPreparedbyGovernments 103

10 TheImportanceofBudgetstoGovernments 169

11 DefinitionoftheReportingEntity 181

12 CashandInvestments—ValuationandDisclosures 225

13 DerivativeInstruments 269

14 CapitalAssets 295

15 DebtandOtherObligations 321

16 LandfillClosureandPostclosureCareCosts 359

17 PostemploymentBenefits—PensionandOther 369

18 CompensatedAbsences 421

19 AccountingforLeases 431

20 NonexchangeTransactions 451

21 RiskFinancingandInsurance-RelatedActivities/PublicEntityRiskPools 465

22 PensionandOPEBPlanFinancialStatements 491

23 EducationalandOtherGovernmentalEntities 567

Appendix:DisclosureChecklist 581

Index 623

v

PREFACE

Governmental accounting isa specializedarea that has undergone significant changes over

thepastfewdecades.Asgovernmentalaccountingstandardshavedeveloped,thecomplexitiesof

preparing financial statements for governmental entities have greatly increased. Providing

meaningful financial information to a wide range of users is not an easy task. Adding to these

challenges,theGovernmentalAccountingStandardsBoard(GASB)broughtsweepingchangesto

thegovernmentalfinancialreportingmodelandisnowcontinuingtheprocessofaddressingmany

important accounting areas related to that model.

Giventhisrapidlychangingenvironment,thefinancialstatementpreparerneedsatechnical

resourcethatprovidesmorethanaccurate,competenttechnicalinformation.Theresourceneedsto

be written to fit today’s governmental accounting environment. It needs to take a fresh look at

someofthelong-standingaccountingquestionsfacedbygovernmentsandtoprovidemeaningful

up-to-date information on recently issued and soon-to-be-issued accounting pronouncements.

Thepurposeofthisbookistomeettheseneedsbyprovidingauseful,complete,andpractical

guide togovernmentalaccountingprinciples andfinancialreporting. Throughout,thebookwill

provide the reader with:

•
An understanding of the concepts and theories underlying each topic discussed.

•
A complete, authoritative reference source to assure the reader that all aspects of a

particular topic are covered.

• Practical guidance to allow financial statement preparers and auditors to meet the

requirements of generally accepted accounting principles for governments and to effi­

ciently and effectively implement new requirements.

Theapproachusedinthisbookistoprovidethereaderwithusefulinformationinausable

format.Accountingtheorymustcorrespondwithpracticalexamplestobeuseful,becausetheory

seldom matchesthespecific situation. Fortechnical informationto beusable,it must beclearly

presentedwithout clutterandunnecessaryrepetition.Thesubstanceof accounting requirements

mustalsobeunderstoodinorderforthemtobeproperlyapplied.Understandingthereasonswhy

technicalrequirementsexistisanimportantingredientinproperlyapplyingaccountingstandards.

The2016editionofthisbookbeginswithanoverviewofgovernmentalaccountingprinciples

andadescriptionofthevarioustypesoffundscurrentlyinusebygovernmentalentities.Itthen

describesbasicfinancialstatementsandprovidesguidanceforreportingvariousassets,liabilities,

revenuesandexpenses/expenditures.Finally,itexaminestheaccountingandfinancialreporting

requirements for several specific types of governmental entities. The book also includes a

“Disclosure Checklist,” which should prove very helpful in determining the completeness of

a governmental entity’s financial statement disclosures.

This book would not have come to fruition without the hard work and perseverance of a

numberofindividuals.JohnDeRemigisofJohnWiley&Sonshadtheconfidencetoworkwith

me in developing the original concept for the book and in ensuring its continuing quality and

success.PamReh’seffortsinproducingpasteditionsofthebookaregreatlyappreciated,asarethe

current members of the Wiley team.

vii
viii Preface

Ofcourse,thetimeandeffortneededtowriteandmaintainthisbookwouldnotbepossible

withoutasupportivefamily,forwhichIamgratefultomywifeMarie,andmysonsChristopher

and Gregory.

Warren Ruppel, CPA

Woodcliff Lake, NJ

August 2015