Asked by jayden pineda on May 20, 2024
Verified
What are the five fund balance categories established by GASB and why did GASB establish these categories?
Fund Balance Categories
Classification of fund balances in governmental accounting that indicates the extent to which spendable resources are subject to external restrictions or are designated for specific purposes.
GASB
The Governmental Accounting Standards Board, which establishes accounting standards for state and local governments in the United States.
- Understand the concepts underpinning governmental accounting standards, including classification and reporting of fund balances.
- Recognize the main stakeholders in state and local government external financial reports and comprehend the objectives of fund balance classifications as defined by the Governmental Accounting Standards Board (GASB).
Verified Answer
TS
Tanvir SinghMay 20, 2024
Final Answer :
GASB established five fund balance categories in response to credit market participants and to standardize fund balance reporting. The five categories are (1) fund balance―nonspendable, (2) fund balance―restricted,(3) fund balance―committed, (4) fund balance―assigned, and (5) fund balance―unassigned.
Learning Objectives
- Understand the concepts underpinning governmental accounting standards, including classification and reporting of fund balances.
- Recognize the main stakeholders in state and local government external financial reports and comprehend the objectives of fund balance classifications as defined by the Governmental Accounting Standards Board (GASB).