Definition
GASB Statement 34 requires two government-wide statements: the statement of net position and the statement of activities. They report all of the government's governmental and business-type activities, use the economic resources measurement focus and full accrual accounting, and include capital assets, depreciation, and long-term liabilities. Fiduciary activities are excluded. Governmental and business-type activities appear in separate columns, with component units discussed separately.
Why it matters in an audit or review
The government-wide statements are what the auditor's opinion units cover along with the fund statements. Auditors test capital asset additions and depreciation, long-term debt, net pension and other postemployment benefit liabilities, and the reconciliation from governmental fund statements to the government-wide statements. Net position is reported as net investment in capital assets, restricted, and unrestricted.
Example
Illustrative: a city spends $2,000,000 on a road. The governmental fund statements show a $2,000,000 expenditure. In the government-wide statements the city capitalizes the road and records depreciation, such as $100,000 for the year on a 20-year life using straight-line.
Common mistakes
- Not reconciling the fund and government-wide totals.
- Leaving out depreciation on infrastructure.
Sources
- GASB Statement No. 34, Basic Financial Statements and Management's Discussion and Analysis for State and Local Governments: https://www.gasb.org
Definitions paraphrase AICPA and FASB guidance; read the standard itself before relying on a requirement. Example figures are illustrative. This page is guidance, not professional advice. Report an error