Lesson: Measurement Focus and Basis of Accounting

In this lesson, Nick Palazzolo, CPA, dives into the intricacies of Measurement Focus and Basis of Accounting, making sense of some complex governmental accounting concepts in an accessible way. Beginning with an overview of the various governmental funds and the distinctions between them, Nick clarifies the practical implications of the governmental fund accounting structure. He then sheds light on the measurement focus, detailing the difference between the 'current financial resources' approach used by governmental funds and the 'economic resources' focus adopted by corporate and not-for-profit entities. Finally, Nick breaks down the basis of accounting, with a particular emphasis on the modified Accrual basis and its unique 'measurable and available' standard in government accounting. This enables the grasping of fundamental concepts that are pivotal for mastering the governmental accounting section of the exam, complete with examples and thoughtful explanations designed to make the material stick.