Lesson: Introduction to Government-Wide Financial Statements

In this lesson, Nick Palazzolo, CPA, serves as your guide into the realm of government-wide financial statements, breaking down the complexities and explaining the unique aspects that characterize them. He delves into the two primary statements involved—the statement of net position and the statement of activities—drawing parallels to the private sector’s balance sheet and income statement. Nick also clarifies the inclusion of assets, liabilities, internal service, and business-type activities, while pointing out the exclusion of fiduciary funds and the appropriate treatment of component units. Moreover, he underscores the requirement by the GASB (Governmental Accounting Standards Board) for these statements to reflect an economic resources measurement focus and a full accrual basis of accounting, shedding light on the nuances of government accounting as distinct from the approach taken by the FASB for corporate entities.