Title
GASB 54 Policy - Approval
History
In February 2009, the GASB (Governmental Accounting Standards Board) issued GASB Statement 54 Fund Balance Reporting and Governmental Fund Type Definition which provides guidance for fund balance categories and classifications. Five categories of fund balances were created and defined by GASB 54 which is applicable for financial statements beginning after June 15, 2010.
To comply with GASB 54, the Finance Department recommends the following policies for approval:
· The Village will report governmental fund balances per GASB 54 definitions in the balance sheet as follows:
o Nonspendable (Funds not in a spendable form such as inventory, prepaid items, and assets held for resale)
o Restricted (Funds governed by externally enforceable restrictions and enabling legislation)
o Committed (Funds governed by Village Board action)
o Assigned (Funds intended for a specific purpose established by Village policy)
o Unassigned (Funds not allotted to other categories and, therefore, not subject to any constraints)
· The Village Board will approve all commitments by formal action. A commitment can only be modified or removed by the same formal action.
· The Finance Director may assign resources and amounts of fund balance to a specific purpose. These assignments will follow Village policy.
· The Village considers restricted amounts to have been spent first when the expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, followed by committed amounts then assigned amounts. Unassigned amounts are used only after the other categories of fund balance have been fully utilized.
GASB 54 also includes changes to governmental fund type definitions. Governmental fund types include the General Fund, Special Revenue Funds, Debt Service Funds, Capital Project Funds, and Permanent Funds. The change in definition for Special Revenue Funds is the only change that will affect the Village’s financi...
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