Financial Reporting: Deriving Government-Wide Financial Statements and Required ReconciliationsLearning ObjectivesSlide 3Getting StartedSources of Information for Conversion ProcessConversion ProcessWorksheet AdjustmentsWorksheet Adjustments (continued)Slide 9Slide 10Slide 11Slide 12Slide 13Overview of ISF Elimination ProcessOverview of ISF Elimination Process (continued)Slide 16Other AdjustmentsSlide 18Prepare Government-Wide Financial StatementsPrepare Reconciliations (shown in Chapter 13 for City of Tulsa)Financial Reporting:Financial Reporting:Deriving Government-WideDeriving Government-WideFinancial Statements and Financial Statements and Required ReconciliationsRequired ReconciliationsChapter 14Chapter 14Learning ObjectivesLearning ObjectivesUnderstand and explain the types of worksheet Understand and explain the types of worksheet adjustments needed to derive Governmental adjustments needed to derive Governmental Activities data for the Government-Wide Financial Activities data for the Government-Wide Financial Statements from Governmental Funds financial Statements from Governmental Funds financial statement data.statement data.Understand and explain the types of worksheet Understand and explain the types of worksheet adjustments needed to derive Business-Type adjustments needed to derive Business-Type Activities data for the Government-Wide Financial Activities data for the Government-Wide Financial Statements from Enterprise Funds financial Statements from Enterprise Funds financial statement data.statement data.Learning ObjectivesLearning ObjectivesPrepare worksheets deriving information for the Prepare worksheets deriving information for the Government-Wide Financial StatementsGovernment-Wide Financial StatementsPrepare the Government-Wide Financial Statements Prepare the Government-Wide Financial Statements from information derived in the conversion from information derived in the conversion worksheetsworksheetsDetermine whether an Internal Service Fund is part Determine whether an Internal Service Fund is part of Governmental Activities or Business-Type of Governmental Activities or Business-Type ActivitiesActivitiesPrepare the required reconciliations of Fund Prepare the required reconciliations of Fund Financial Statements to Government-Wide Financial Financial Statements to Government-Wide Financial StatementsStatementsGetting StartedGetting StartedFund financial statements are the Fund financial statements are the necessary foundation for the Government-necessary foundation for the Government-Wide Financial StatementsWide Financial StatementsPreparing the G-W statements is a matter Preparing the G-W statements is a matter of converting fund information into G-W of converting fund information into G-W informationinformationConversion process occurs at the end of Conversion process occurs at the end of the yearthe yearXSources of Information for Sources of Information for Conversion ProcessConversion ProcessFund financial statements – primarily the Total Fund financial statements – primarily the Total columnscolumnsGovernmental Funds are affected by the most Governmental Funds are affected by the most adjustmentsadjustmentsLimited adjustments to the Enterprise FundsLimited adjustments to the Enterprise FundsInternal Service Funds will be eliminatedInternal Service Funds will be eliminatedFiduciary Funds not included in adjustment process Fiduciary Funds not included in adjustment process as they are not included in Government-Wide as they are not included in Government-Wide Financial StatementsFinancial StatementsGeneral Capital AssetsGeneral Capital AssetsGeneral Long-Term LiabilitiesGeneral Long-Term LiabilitiesConversion ProcessConversion ProcessOverview of reasons for adjustmentsOverview of reasons for adjustmentsSummary of types of worksheet Summary of types of worksheet adjustmentsadjustments12Worksheet AdjustmentsWorksheet AdjustmentsEliminate capital outlay expenditures Eliminate capital outlay expenditures (563)(563)Most will affect capital assetsMost will affect capital assetsThose not meeting capitalization threshold will Those not meeting capitalization threshold will become functional expensesbecome functional expensesSale of capital assets Sale of capital assets (566)(566)Reported as OFS – Proceeds from sale in Reported as OFS – Proceeds from sale in Governmental FundsGovernmental FundsConverted to gain or loss and assetConverted to gain or loss and assetWorksheet Adjustments Worksheet Adjustments (continued)(continued)Record Depreciation Expense Record Depreciation Expense (566)(566)Information should come from Capital Asset Information should come from Capital Asset note disclosurenote disclosureSee example from City of TulsaSee example from City of TulsaAdjust long-term debt issues Adjust long-term debt issues (566)(566)OFS amounts will not appear on GW OFS amounts will not appear on GW operating statementoperating statementMust capture and amortize bond issue costs, Must capture and amortize bond issue costs, premiums, and discountspremiums, and discountsXWorksheet Adjustments Worksheet Adjustments (continued)(continued)Eliminate debt principal payments Eliminate debt principal payments (567)(567) – – will become reductions in debtwill become reductions in debtConvert Interest Expenditures to Interest Convert Interest Expenditures to Interest Expense Expense (567)(567)Some of expenditures for current year may be Some of expenditures for current year may be expenses in previous yearexpenses in previous yearMust accrue interest incurred since last Must accrue interest incurred since last interest payment datesinterest payment datesWorksheet Adjustments Worksheet Adjustments (continued)(continued)Convert GLTL pensions, claims & Convert GLTL pensions, claims & judgments, and compensated absences to judgments, and compensated absences to expenses expenses (568)(568)Increases in GLTL will probably be Increases in GLTL will probably be expenses of current yearexpenses of current yearDecreases in GLTL may represent Decreases in GLTL may represent expenses in prior year and are already expenses in prior year and are already included in expendituresincluded in expendituresWorksheet Adjustments Worksheet Adjustments (continued)(continued)Converting Revenues Converting Revenues (569)(569)Deferred Revenues at the beginning of the