What is unassigned fund balance?
Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications, i.e. everything left over once the total amount has the following subtracted: non-spendable, restricted, committed, and assigned funds.
Can you have a negative unassigned fund balance?
A negative unassigned fund balance can only be reported if the total fund balance is negative, and only after all other fund balance classifications are exhausted.
What does negative unassigned fund balance mean?
The general fund is the only fund that reports a positive unassigned fund balance amount. In general, if the total fund balance is negative (exclusive of any nonspendable amount), report the negative balance as unassigned. For more information, see Governmental Funds.
What are the five fund balance categories required by GASB 54?
Statement 54 abandons the reserved and unreserved classifications of fund balance and replaces them with five new classifications: nonspendable, restricted, committed, assigned and unassigned.
What is an unreserved fund balance?
The portion of fund balance that is not reserved is fittingly called unreserved fund balance. It represents resources that can be used for any purpose of the fund they are reported in. Unreserved fund balance in a debt service fund can be used to repay any outstanding debt.
What is an assigned fund?
In governmental funds other than the general fund, assigned fund balance represents the remaining amount that is not restricted or committed. Unassigned fund balance is the residual classification for the government’s general fund and includes all spendable amounts not contained in the other classifications.
How is unreserved fund balance calculated?
Undesignated, unreserved fund balance is the difference between total fund balance and the portion that is reserved and designated.
What is the difference between fund balance and retained earnings?
In governmental accounting, we have specific names for retained earnings as well, depending on fund type. In governmental funds, like the general fund and capital projects fund, retained earnings is called fund balance. In proprietary funds, like the water fund and sewer fund, retained earnings is called net position.
What is the difference between committed and assigned fund balance?
Commitments may be changed or lifted only by the government taking the same formal action that originally imposed the constraint. Assigned fund balance comprises amounts intended to be used by the government for specific purposes.
What is the difference between cash balance and fund balance?
What is a Cash Balance? Cash balances are a different measure from fund balance. Cash balances show what cash remains after transactions have gone through the payment process in the system. Transactions that affect cash balance include vouchers that have paid.
What is fund balance in nonprofit?
The net assets (also called equity, capital, retained earnings, or fund balance) represent the sum of all the annual surpluses or deficits that an organization has accumulated over its entire history.
Is fund balance the same as net position?
Is fund balance the same as retained earnings?
Why is fund balance important?
It is essential that governments maintain adequate levels of fund balance to mitigate current and future risks (e.g., revenue shortfalls and unanticipated expenditures) and to ensure stable tax rates. In most cases, discussions of fund balance will properly focus on a government’s general fund.
What is unreserved fund balance?
What is general fund balance?
What is Fund Balance? Fund balance is an accounting term to describe the difference between a fund’s assets and liabilities. For “cash basis” entities (the majority of local governments in Washington), fund balance represents the net cash after all revenues have been deposited and all expenses have been paid.