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BUS 5436 Governmental and Nonprofit Accounting

Course Description

Examines the procedures of accounting, financial reporting and budgeting for governmental nonprofit entities. Covers the theories behind standards set by the Governmental Accounting Standards Board and its integrated accounting and financial reporting model. Introduces research concepts used in governmental and nonprofit accounting.

Course Objectives

  • Identify the goals and process of financial reporting for governmental and nonprofit entities
  • Recognize accounting and reporting issues of governmental and nonprofit entities
  • Identify issues related to governmental or nonprofit accounting or reporting and research authoritative literature to arrive at an optimal solution
  • Recommend the appropriate models for the theoretical development of accounting and reporting for governmental and nonprofit entities

Week 1

Lecture: Introduction to Governmental and Nonprofit Accounting
Lecture: The Environment and Foundation of Governmental Accounting


  • Describe the key unique characteristics of government and nonprofit (G&NP) organizations
  • Discuss the major types of G&NP organizations and their importance in our economy
  • Discuss the similarities and differences between profit-seeking and G&NP organizations
  • Identify the key distinguishing characteristics, concepts and objective of G&NP accounting and financial reporting
  • Discuss the users and uses of government financial statements
  • Identify authoritative resources of financial reporting standards for various types of G&NP organizations and the level of authority (hierarchy) of various pronouncements and guides
  • Visualize and discuss the major overall aspects of the GASB state and local government financial reporting, including the dual perspective of government-wide and fund financial statements
  • Identify the measurement focus and basis of accounting used for each category of funds and the financial statements required for funds of each category
  • Analyze the effects of transactions on the proprietary fund and governmental fund categories and on the General Capital Assets and General Long-Term Liabilities accounts
  • Discuss typical budgetary accounting and reporting requirements
  • Compare specific types of funds in each fund category and different uses of each fund type in each category
  • Explain the financial reporting requirements for a government’s basic financial statements and its comprehensive annual report

Week 2

Lecture: General Fund and Special Revenue Funds


  • Discuss the differences and similarities between the General Fund and Special Revenue Funds
  • Explain measurement funds and basics of accounting used for these funds
  • Analyze fact situations and prepare journal entries to record most common General Fund and Special Revenue Fund transactions and events, including inter-fund activity
  • Prepare adjusting and closing entries for the General Fund and Special Revenue Funds
  • Define and identify special items and extraordinary items
  • Identify the five fund balance reporting classifications
  • Prepare General Fund and Special Revenue Fund GAAP-based financial statements

Week 3

Lecture: Budgeting, Revenue Accounting and Expenditure Accounting



  • Utilize basic budgetary accounting and reporting concepts, requirements and practices
  • Explain the role of the budget in governmental fund planning, budgetary control, budgetary accounting, and budgetary reporting
  • Identify commonly used budgeting terminology, approaches and recommended practices
  • Explain the concept of budgetary control points
  • Discuss the basic procedures involved in preparing and adopting a budget
  • Compare the differences between Budgetary Fund Balance and GAAP Fund Balance
  • Determine when various types of governmental fund revenues should be recognized and reported
  • Identify the four categories of non-exchange transactions and when to recognize related assets and revenues
  • Discuss and apply modified accrual revenue recognition criteria in both simple and complex situations
  • Identify accounting for the levy, collection, revenue recognition, and enforcement of property taxes and other taxes
  • Account for and report governmental fund investment income in accordance with GAST Statements 31 and 40
  • Distinguish and account for various types of intergovernmental revenues, including pass-through grants and other grants, entitlements, shared revenues and payments in lieu of taxes
  • Differentiate classification of and accounting for various other types of governmental fund revenues and other (nonrevenue) financing sources
  • Account for and report changes in revenue accounting principles and error corrections
  • Define expenditures as used in governmental fund accounting and reporting
  • Apply governmental fund expenditure recognition guidance
  • Account for personal services costs, materials and supplies (purchases and consumption method), and prepayments in governmental funds
  • Account for typical debt service and capital outlay expenditures
  • Determine accounting and reporting for capital leases, claims and judgments, compensated absences, and pension and other postemployment benefit expenditures in governmental funds
  • Account for and report changes in expenditure accounting principles and error corrections

Week 4

Lecture: Capital Projects Funds and Debt Service Funds


  • Explore the nature and purposes of Capital Projects Funds (CPFs) and when CPFs are used
  • Identify the typical capital project financing sources, how many Capital Projects Funds are required and the life cycle of a Capital Projects Fund
  • Determine the costs that should be charged to the Capital Projects Fund
  • Describe Capital Projects Fund accounting for general long-term debt issuances
  • transactions and events
  • Maintain detailed general ledger journal entries to record typical Capital Projects Fund
  • Prepare Capital Projects Fund financial statements
  • Explain the basic nature and purposes of Debt Service Funds and the types of liabilities serviced through Debt Service Funds
  • Determine when Debt Service Funds are required and when debt service on general long-term liabilities may be accounted for in other funds
  • Identify when expenditures for debt service on general long-term liabilities (GLTL) are recognized
  • Observe the conditions under which governments are permitted to accrue to GLTL principal and interest expenditures before maturity
  • Record debt service transactions and prepare Debt Service Fund financial statements
  • Identify accounting and reporting for special assessment Debt Service Funds
  • Record and report refunding of general long-term liabilities

Week 5

Lecture: General Capital Assets, General Long-Term Liabilities, Permanent Funds and Enterprise Funds


  • Explain how governments maintain the general capital assets (GCA) and general long-term liabilities (GLTL) information
  • Identify various types of transactions affecting general capital assets and general long-term liabilities
  • Compare the relationships between governmental funds, general capital assets and general long-term liabilities
  • Report general infrastructure capital assets properly
  • Apply the modified approach for accounting for infrastructure capital assets
  • Identify financial reporting requirements for GCA and GLTL
  • Identify the nature and use of Permanent funds and how to report them
  • Identify transactions that affect both governmental funds, GCA and GLTL
  • Determine what activities should be reported using Enterprise Funds
  • Describe the proprietary fund accounting principles
  • Journalize typical proprietary fund transactions
  • Identify the formats and classifications of proprietary fund financial statements
  • Prepare the proprietary fund statements

Week 6

Lecture: Internal Service Funds, Trust Funds and Agency Funds


  • Describe the nature and usage of Internal Service Funds (ISF)
  • Identify the accounting principles that apply to ISF
  • Analyze the pricing policies and methods that are used in ISF
  • Prepare basic journal entries for various types of ISF
  • Prepare ISF financial statements, including combining statements
  • Identify the unique aspects of accounting for ISF
  • Discuss the circumstances in which fiduciary funds are used to report assets held by governments in fiduciary relationships
  • Define and distinguish among the four types of fiduciary funds
  • Prepare Agency Fund financial statements
  • Prepare Trust Fund financial statements
  • Account for common transactions that affect more than one fund and/or general capital assets and general long-term liabilities

Week 7

Lecture: Financial Reporting


  • Identify a government’s basic financial statements
  • Implement the format and content of the fund financial statements and the government-wide financial statements
  • Analyze the concept and content of required supplementary information (RSI)
  • Identify a government’s major funds and how to prepare its fund financial statements
  • Distinguish program revenues from general revenues
  • Identify the unique reporting provisions for infrastructure capital assets
  • Identify the required information components of Management’s Discussion and Analysis (MD&A)
  • Recognize the types of notes to the financial statements required for governments
  • Identify reporting requirements for special purpose governments
  • Explain the types of worksheet adjustments needed to derive governmental activities data for the government-wide financial statements from the governmental funds financial statement data
  • Explain the types of worksheet adjustments needed to derive business-type activities data for the government-wide financial statements from Enterprise Funds financial statement data
  • Compare the two-worksheet approach and the one-worksheet approach to deriving governmental activities data
  • Prepare government-wide financial statements using information derived in the conversion worksheets
  • Prepare the required reconciliations of fund financial statements to government-wide financial statements

Week 8

Lecture: Financial Reporting and the Comprehensive Annual Financial Report


  • Explain the nature and contents of the three major sections of a Comprehensive Annual Financial Report
  • Describe the relationships between combining financial statements and the basic financial statements
  • Determine the combining statements that a government needs to present in its Comprehensive Annual Financial Report
  • Explain how to determine whether a government should treat an associated entity as a component unit
  • Identify which component units should be blended and which should be discretely presented
  • Compare the differences between blending and discrete presentation
  • Explain the differences between and among the reporting requirements for related organizations, jointly governed organizations, and joint ventures

The course description, objectives and learning outcomes are subject to change without notice based on enhancements made to the course. October 2013