Finance

Issue

Which governmental activities should be reported as separate lines in the statement of activities?

Reference

GASB Statement 34, ¶ 38: "The operations of the reporting government should be presented in a format that reports the net (expense) revenue of its individual functions. An objective of using the net (expense) revenue format is to report the relative financial burden of each of the reporting functions on its taxpayers."

GASB Statement 37, ¶ 10 (supersedes GASB 34, ¶ 39): "At a minimum, the statement of activities should present:

1. Activities accounted for in governmental funds by function,27 as discussed in NCGA Statement 1, paragraph 112, to coincide with the level of detail required in the governmental fund statement of revenues, expenditures, and changes in fund balance.
2. Activities accounted for in enterprise funds by different identifiable activities.c"

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27The term function is used in this Statement to refer to the minimum level of detail for both governmental and business-type activities required to be presented in the statement of activities.

c An activity within an enterprise fund is identifiable if it has a specific revenue stream and related expenses and gains and losses that are accounted for separately.

GASB Statement 34, ¶ 40: "Governments are encouraged to provide data in the statement of activities at a more detailed level if the additional detail provides useful information without significantly reducing readers' ability to understand the statement. No specific level of detail is appropriate for all governments; some have hundreds of programs and others have only a few. Therefore, reporting in greater detail than the minimum requirements in paragraph 39 may be practical for some governments but not for others."

Evaluation

Miami-Dade County's governmental funds currently report the following functions in the statements of revenues, expenditures, and changes in fund balance:

• Policy formulation and general government
• Protection of people and property
• Physical environment
• Transportation
• Health
• Socio-economic environment
• Culture and recreation

These functions are the minimum level required for reporting the governmental activities. Will reporting at these levels provide meaningful information for most users of the financial statements or should more detailed levels be used?

Position

The level of detail to be presented for governmental activities in the statement of activities will be the functions used in the governmental funds statement of revenues, expenditures, and changes in fund balances. This level provides meaningful information to most financial statement users and is found to be appropriate at this time.