The User's Perspective

Winter 2012-13

New Editions of the GASB’s User Guides to Financial Statements

            New editions of the GASB’s user guides to state and local government financial statements are now available, and a brand new guide on business-type activities will be available soon. Originally published in 2000, 2001, and 2005, the guides are designed to be nontechnical and broadly accessible to those new to government finance, the long-time public manager, and everyone in between. In addition, they serve as ideal companions to the general accounting, budgeting, and government finance texts used in  undergraduate and graduate programs. The titles in the fully updated and expanded series are:

  • What You Should Know about Your Local Government’s Finances

  • What You Should Know about Your School District’s Finances
  • What You Should Know about the Finances of Your Government’s Business-Type Activities (coming soon)
  • An Analyst’s Guide to Government Financial Statements.

What You Should Know Guides

            Three guides in the series provide a comprehensive but easy-to-read introduction to the annual financial reports of local governments, school districts, andbusiness-type activities (such as utilities, hospitals, and colleges). What You Should Know about Your Local Government’s Finances and What You Should Know about Your School District’s Finances provide many useful features for users of government financial reports at all levels of expertise, including:

  • An annotated set of illustrative financial statements (complete with management’s discussion and analysis) for a local government or a school district, and many illustrated note disclosures and supporting schedules
  • A running story that helps the reader understand the concepts by relating them to personal financial decisions
  • An introduction to basic financial ratios that can assist users in to analyzing financial statements
  • Boxes and sidebars that further explore the issues raised in the text, provide more detailed definitions and explanations, and offer tips on using financial statement information
  • Easy identification of key terms that are defined in an exhaustive glossary that accompanies the text
  • An overview of the basics of public-sector accounting and financial reporting.

            The new editions cover more note disclosures and supporting information than the original guides, and include major pronouncements such as those on other postemployment benefits (OPEB) and the new fund balance classifications.

            What You Should Know about the Finances of Your Government’s Business-Type Activities focuses on the unique features of financial reporting by the activities that governments operate similar to businesses, charging fees in return for service. This guide contains all of the features of the local government and school district guides, and also presents illustrative financial statements for a water and sewer utility, an airport, a public hospital, a public university, a toll road authority, a mass transit system, and a rate-regulated electric utility.

An Analyst’s Guide

            An Analyst’s Guide to Government Financial Statements is aimed at more experienced and frequent users of government financial statements. In addition to introducing and describing the information that can be found in a state or local government financial report, An Analyst’s Guide explores how basic analytical techniques may be applied to that information to assess issues such as financial position, financial condition, liquidity, solvency, fiscal capacity, and exposure to risk.

            The new edition of An Analyst’s Guide has been expanded to include the information found in What Else You Should Know about a Government’s Finances: A Guide to Notes to the Financial Statements and Supporting Information, to create a comprehensive guide to the entire financial report, including financial statements, note disclosures, required supplementary information, and supplementary information. From the transmittal letter to the statistical section and everything in between, the guide describes the content and purpose of the disclosures and presentations, and explains how the information can be used to understand and assess the financial health of a government. The topics covered by the guide include:

  • Introductory and background information, such as management’s discussion and analysis and the summary of significant accounting policies
  • The statement of net position and related notes and supporting information about assets (such as investments, receivables, and infrastructure) and liabilities (such as long-term debt and pensions)
  • The statement of activities and related notes and supporting information about revenues and expenses (such as debt service, lease payments, and special and extraordinary items)
  • The fund financial statements—governmental, proprietary, and fiduciary—and related notes and supporting information (such as interfund transfers and balances and budgetary comparisons)
  • Reporting by special-purpose governments (for example, school districts or water districts) and component units (for example, universities).

            Fully updated and expanded to cover the major new pronouncements of the past decade, An Analyst’s Guide addresses the reporting of sales and pledges of receivables and future revenues, interest rate swaps and other derivatives, obligations and costs associated with pollution remediation, deposit and investment risks, intangible assets, municipal bankruptcy, and long-term service concession arrangements to operate and maintain major infrastructure assets such as toll roads.

            The new, combined guide features 125 annotated illustrations of financial statements, note disclosures, statistical section schedules, and other supporting information. The guide contains a full set of illustrative financial statements for a state, city, school district, a fire district, a public university, and a community college district, and an illustrative management’s discussion and analysis for a city. An Analyst’s Guide expands upon many of the key features of the other guides, including boxes and sidebars, an extensive glossary, the calculation and use of financial ratios, and the basics of governmental accounting.

Purchasing the Guides

            All of the GASB’s user guides can be purchased from the GASB’s on-line store. The What You Should Know guides are $14.95 each and An Analyst’s Guide to Government Financial Statements is $19.95.

Further Reading