AFA 615 Chapter Notes - Chapter 10: Contingent Liability, Governmental Accounting Standards Board, Credit Risk
2 Jul 2016
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Ensuring that the government has the financial capacity to sustain desired services is the primary reason managers monitor financial performance through financial reports. Gasb produced 2 guides to financial statements. Managers also need to demonstrate they spend resources responsibly. An analysts guide to government financial statements in which it points out the process of drawing meaning from financial statement data is an art form, not a science. Accountability: fiscal position, fiscal condition and economic condition. Financial position tends to be a short-term concept that focuses on the assets that are cash or are normally converted to cash in the near future and liabilities that require cash in the near future. Financial condition the probability that a government will meet both its financial obligations to creditors, consumers, employees, taxpayers, suppliers, constituents, and others as they become due and its service obligations to constituents, both currently and in the future. Icma defines financial condition as composed of 4 types of solvency:
