Components of GASB Integrated Accounting and Financial Reporting Model

A typical state or local government presents data in its financial report from two different perspectives. Each perspective represents one of two levels of financial statement reporting. The fund financial statements present the perspective of the government as a collection of separate funds, while the government-wide financial statements offer a view of the government as a single, integrated financial reporting unit. This unique combination of fund and government-wide financial statement reporting is known as the integrated reporting model. 

Differences Between Governmental and Business-Type Activities

The government-wide financial statements use separate columns to distinguish governmental activities from business-type activities (GASB Statement 34, paragraph 12). As a rule, governmental fund data are incorporated into the governmental activities column of the government-wide financial statements and enterprise fund data are incorporated into the business-type activities column (GASB Statement 34, paragraph 15). Because the resources of fiduciary funds are generally not available for government spending, by definition, to support the government’s programs, data from these funds are not incorporated into the government-wide financial statements (GASB Statement 34, paragraph 12b).

How data from an internal service fund are incorporated into the government-wide financial statements will depend on which types of funds (general fund or proprietary) predominantly utilize the internal service fund's goods and services. Thus, the data from internal service funds are normally combined with the data from governmental funds in the governmental activities column. However, whenever the predominant users are enterprise funds, the internal service fund’s data are properly incorporated with the data from the enterprise funds in the business-type activities column (GASB Statement 34, paragraph 62). 

Generally accepted accounting (GAAP) allow a government the flexibility to incorporate data from an enterprise fund into the governmental activities column (or to incorporate data from a government fund into the business-type activities column) if it wants to (GASB Statement 34, paragraph 15 indicates that governmental activities "are usually reported in governmental funds and internal service funds" and that business-type activities "are usually reported in enterprise funds.") For example, a government might decide to use an enterprise fund to report on a heavily subsidized operation supported by user fees while incorporating data from that fund as part of governmental activities to emphasize the extent of the subsidy and to highlight dependence on taxes (GASB Comprehensive Implementation Guide, 7.7.4).