Government-wide financial statements are used to display information on all non-fiduciary activities for the city meaning that they do not report fiduciary funds and component units. They are mainly comprised of the statement of net position and the statement of activities, which are prepared through the economic resources measurement focus and the accrual basis of accounting ( Brown, 2017 ). These statements are very important because they differentiate functions from governmental activities from other functions that are envisioned to recover all or a substantial amount of business-type activities.
Fund financial statements, on the other hand, refer to a group of interrelated accounts that are mainly used to maintain control over those resources that have been set aside for specific purposes ( Brown, 2017 ). Houston makes use of fund accounting as a means of demonstrating its compliance with federal finance-related legal requirements. The city of Houston has three main categories of these funds; government funds, proprietary funds, and fiduciary funds. This implies that fund financial statements include all the fiduciary funds and components of the city.
Delegate your assignment to our experts and they will do the rest.
From the figures, one is able to deduce Houston’s net position on a government-wide basis. The value of liabilities and deferred inflows was lower than the value of assets and deferred outflow, with a margin of $1.855 billion. It is imperative to note that a person cannot deduce this figure from fund financial statements in the CAFR. The key elements that led to an increase in Houston’s increased net position by $1.605 billion can also be identified in government-wide statements, together with their respective decrements. The financial position of the government can, therefore, be determined based on an analysis of these elements. In fund financial statements, these figures are not available for analysis.
References
Brown, C (2017). City of Houston, Texas. Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2017 . Retrieved from
https://www.houstontx.gov/controller/cafr/cafr2017printerfriendly.pdf
