State and local government
The Government-Wide Bridge
Full accrual restores what the funds omit: add net capital assets, subtract long-term debt, and exclude fiduciary activities entirely.
How the exam words it
- -The stem asks which activities the government-wide statements include or exclude.
- -It gives fund balance with capital assets and long-term debt and asks for net position.
- -It gives capital outlay, depreciation, principal, or bond proceeds and asks for the change in net position.
- -It asks about net investment in capital assets, the modified approach, MD&A, or the net pension liability.
The playbook
- 1Report only governmental and business-type activities on full accrual, and exclude fiduciary activities because those resources belong to others.
- 2Reconcile fund balance to net position by adding net capital assets and unavailable revenue and subtracting long-term liabilities such as bonds and the net pension liability.
- 3Reconcile the change by adding back capital outlay and subtracting depreciation, adding back principal repayment, and removing bond proceeds.
- 4Compute net investment in capital assets as capital assets net of depreciation and related debt, and measure the net pension liability as total pension liability minus plan net position.
The trap
Adding long-term debt instead of subtracting it in the reconciliation, or leaving fiduciary activities in the government-wide statements, which exclude them.
How the exam varies it
The same pattern, re-skinned along these axes:
Which activities are reported government-wideFund balance to net position versus change to change in net positionNet position components versus the pension, infrastructure, and MD&A rules
Drill this pattern
8 questions of The Government-Wide Bridge from across the AUD topics. Clear it by getting 5 right with a streak of 3.