An example of an item that would be reported in the nonspendable fund balance is endowments.
CFMP ProcedurePurposeThis procedure provides guidance to City of Portland staff in the classification and reporting of fund Show
I - Explanation and Examples of Fund Balance Components in Governmental FundsIn compliance with GASB 54, for financial reporting of governmental funds, the City of Portland shall classify fund balance in one or more of the following components: non-spendable, restricted, committed, assigned, and unassigned. Examples of the five fund balance components are provided below. A. Non-spendable Funds B. Restricted Funds C. Committed Funds D. Assigned Funds
E. Unassigned Funds II - Authority to Establish and Change Constraints on the Use of ResourcesCity bureaus are responsible for obtaining the appropriate level of authority to establish and/or change the constraints on the use of funds, in compliance with GASB 54 and as indicated below: A. Non-spendable funds that are so classified due to legal or contractual constraints may only be modified or released from such designation through the level of legal action or contract clause that created the original constraint. B. Restricted funds
are amounts mandated for a specific purpose that is either externally imposed such as by creditors, grantors, contributors, or law or regulations of other governments or imposed by law through constitutional provision or enabling legislation. Funds designated as restricted can C. Committed funds are amounts that are set aside for a specific purpose by City Council adoption of resolution or ordinance. Funds designated as committed can only be released from commitment by City Council resolution or ordinance. D. Assigned funds are amounts set aside for an identified purpose by the City Council in accordance with a formal budget process and with the approval of the appropriate bureau director. Funds designated as assigned can only be modified or released from restriction in the same manner. E. Unassigned Funds
III - Stabilization ArrangementsReserve funds that formally set aside amounts for use in emergency situations or revenue shortfalls are considered “stabilization arrangements” under GASB guidance. Stabilization arrangements should be classified as restricted or committed if they meet the criteria for such classifications, based on the source of the constraint on their use. An example of a stabilization arrangement is the authorization to use funds from the General Reserve Fund for specified purposes, when certain specific non-routine circumstances exist, as adopted by City Council resolution or ordinance. See FIN-2.07 Reserve Funds for further discussion. ResponsibilityThe Accounting Division of the Bureau of Revenue and Financial Services, Office of Management and Finance, in coordination with the City Budget Office and the related bureaus, shall be responsible for accurate and timely classification and reporting of fund balances in governmental funds. Related Policies and ProceduresFIN 2.05 Financial Reporting HistoryAdopted September 25, 2015 by the Chief Financial Officer under rulemaking authority established in What is included in Nonspendable fund balance?Statement 54 establishes the following classifications and the relative strength of the constraints that control how specific amounts can be spent: Nonspendable fund balance includes amounts that are not in a spendable form (inventory) or are required to be maintained intact (endowment trust).
What is a Nonspendable fund?Nonspendable – consists of assets that are inherently nonspendable in the current period either because of their form or because they must be maintained intact, including prepaid items, inventories, long-term portions of loans receivable, financial assets held for resale, and principal of endowments.
What are the 5 types of fund balances?Nonspendable fund balances; • Restricted fund balances; • Committed fund balances; • Assigned fund balances; and • Unassigned fund balances. Fund balances are divided into five (5) parts listed above. A Nonspendable or Restricted Fund Balance identifies the part of the fund balance not available for appropriation.
Which of the following governmental funds must be reported as a major fund?Major fund reporting is applied only to governmental funds (i.e., general, special revenue, debt service, capital project, and permanent funds) and enterprise funds. Internal service funds are excluded from the major fund reporting requirements.
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