Question

In reviewing the basic government financial statements, what types of issues and or confusion might evolve out of the use and deciphering of these statements? How might we better explain these for the end users benefits and interpretation?

Answer 1

The confusion often arises between the restricted fund balance and the committed fund balance as both terms look interchangeable.However, The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. Whereas The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision-making authority.