![]() GAAP governments are not created to generate tax revenue. Miscellaneous revenues provided they are operating revenues (i.e., directly related to principal operations).Fees related directly to their principal operations (e.g., connection fees if offset by current period expenses, i.e., not capitalized, etc.).Interest expense, including premium or discount amortization on debt and debt issue expense.ġ.5.90 Generally governments should record the following proprietary fund operating revenues:.Interest and dividends and realized and unrealized gains and losses on investments.Gains or losses on sales of capital assets.Exchange-like transaction revenues, such as passenger facility charges, certain tap fees, certain developer contributions and certain grants when restricted for capital or non-capital financing purposes.Operating grants and contributions (both received and made) and grants and contributions that are not restricted to either operating or capital.ġ.5.80 According to the GASB Statement 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities that Use Proprietary Fund Accounting operating cash flows category would exclude most revenues that considered to be non-exchange and exchange-like transactions and financing and investment-related revenues/expenses, including: Operating revenues are generally those that enter into the determination of the operating income. ![]() The ongoing principal operation is determined by the purpose of the individual enterprise fund.ġ.5.70 GASB Statement 34, paragraph 102, indicates that one consideration for defining operating revenues and expenses is how individual transactions would be categorized for cash flows from operating activities in the cash flows statement. For example, interest is operating revenue if the principal activity of the fund is to provide loans to generate income. Paragraph 100, further requires proprietary to distinguish between operating and nonoperating revenues and expenses.ġ.5.60 The objective of the distinction of nonoperating and operating is to display the extent to which operating expenses are covered by revenues generated by principal ongoing operations ( 2015-1 Comprehensive Implementation Guide, Question 7.73.4 ). The fact that the revenue supports the operations does not impact its classification which again refers to the revenue origin.ġ.5.50 GASB Statement 34, paragraph 100 requires proprietary fund revenues to be reported by major source (net of discounts and allowances). ġ.5.40 The operating nature of revenue is derived from the source of the revenue NOT its purpose. Since the State Auditor’s Office is required to provide comparative statistics for all local governments, the Office made some decisions which are based on a reasonable extension of existing standards that do not have direct citations in GAAP literature.ġ.5.30 GASB Statement 34, Basic Financial Statements – and Management Discussion and Analysis – for State and Local Governments, paragraph 436, states that there are two criteria to consider when defining revenues and expenses as operating: (1) does the revenue/expense result from the fund’s principal purpose, and (2) is the revenue/expense allowed to be considered operating on the statement of cash flows. Non-Operating matrix here.ġ.5.20 Because operating revenues/expenses are not authoritatively defined in the accounting literature, there is no assurance that the usage of these term is standardized. The governments may use the matrix as a guide for the preparation of their statement of revenues, expenses and changes in net position (operating statements).ĭownload the Operating vs. ![]() BARS codes that can be either operating or non-operating will need to be allocated in the annual filing system. Non-operating” identifies the classifications as they are reflected in the annual filing system. ![]() Several BARS codes have been defined as operating or non-operating, however some BARS codes can be either operating or nonoperating. 1.5 Determining Operating/Nonoperating Revenues/Expenses in Proprietary Fundsġ.5.10 The Proprietary Fund Statement of Revenues, Expenses, and Changes in Net Position requires governments to distinguish operating revenues and expenses from non-operating revenues and expenses.
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