Debt Service Funds

A major goal of governmental financial reporting is assessing financial performance, that is, how well the government is doing with the money entrusted to it. From the standpoint of making judgments about the performance of government funds and government finance, the financial reports are a good place to start. These reports can provide a considerable amount of the information for gauging financial compliance, success, and health. Governmental and nonprofit accounting both use the concept of fund accounting. In fund accounting, the entity is divided into subsets or "funds" each with its own self-balancing set of accounts. Even though GASB Statement #34 will dramatically change the reporting format, the concept of fund accounting will remain the key difference between governmental and private sector accounting. A look at the various types of funds can lead to a better understanding of the impact they have on accounting disciplines. The funds are grouped into three fund types: governmental, proprietary, and fiduciary.

English: CBO Long-Term Public Debt Scenarios

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There are also account groups, but account groups are not funds because they do not have transactions in the ordinary course of business. Instead, they are holding places for items such as fixed assets and long-term debt. Our focus is on one example of a governmental fund called a debt service fund. Codification section 1300.104a(4) defines a debt service as a fund to account for the accumulation of resources for, and the payment of, general long-term principal and interest. Debt service funds are used for the accumulation of monies to make required payments on principal and interest for such liabilities as bonds and capital lease payments. General long-term liabilities are those that arise from activities of Governmental funds and that are not accounted for as fund liabilities of a proprietary or fiduciary fund. General long-term liabilities are reported in the governmental activities...