BAR, Business Analysis and Reporting

Sources for Deriving Government-Wide Statements and the Reconciliations

Last reviewed 2026-10-06

The standards and authorities behind PocketCPA's BAR lessons on Deriving Government-Wide Statements and the Reconciliations. The topic rests on GASB Statement No. 34 (paragraphs 62, 63, 75-77, 79-83, 85-90, 92, 96, 104 and Illustrations C-1, C-2 and C-3), GASB Statement No. 63 (paragraphs 6-7) and GASB Statement No. 65 (paragraphs 3, 6, 9, 10, 15, 30, 31, 32 and 33).

About this topic

A township issues 8,000,000 of general obligation bonds, builds a public safety building, and closes the year. Its governmental fund statements report fund balance up 900,000. Its government-wide statements report net position down 486,250. Same township, same year, same building, same bonds, and the two answers differ in direction as well as in amount. Neither is wrong. They are computed on two different measurement systems, and GASB Statement 34 requires a reconciliation, the exhibit that names every difference and proves the two agree once the differences are counted.

The cause sits in two sentences of the Statement itself. Governmental funds are reported on the current financial resources measurement focus and the modified accrual basis. The government-wide statements are reported on the economic resources measurement focus and the accrual basis, which is the pairing proprietary funds already use. Same government, same transactions, two measurement systems. The conversion runs one way only, from the fund numbers a government keeps its books on to the government-wide numbers it publishes beside them. The adjusting work therefore falls almost entirely on the governmental side.

Key points

The reconciliation converts fund-level modified accrual results to government-wide full accrual results.
Capital assets are added at historical cost less accumulated depreciation in the government-wide statements.
General long-term liabilities appear only in the government-wide statements, not in governmental fund statements.
Internal service fund balances are typically reclassified into governmental activities in the government-wide statements.

What the lessons cover

Why a conversion is needed
Converting the balance sheet to net position
Converting fund balance changes to change in net position
Presenting the reconciliations
The GASB 34 illustration, reconciled line by line
Capital asset disposals and the line most candidates never learn
Debt: premiums, refundings, issuance costs, and what does not reconcile
The internal service fund appears in both bridges
Revenue timing: a balance on one bridge, a change on the other
Items that look like reconciling items and are not
Vocabulary control, and the two equity systems
Working the bridge backward, and checking the answer

Authoritative references

GASB Statement No. 34:

Paragraph 62, internal service fund residual balances reported in the governmental activities column, or in business-type activities when enterprise funds are the predominant or only participants.
Paragraph 63, the eleven fund types.
Paragraphs 75 and 76, with footnote 35, the major fund criteria and the exclusion of internal service funds.
Paragraph 77, the summary reconciliation at the bottom of the fund statements or in an accompanying schedule, with a more detailed explanation in the notes where aggregation obscures the nature of individual elements, cross-referencing paragraphs 85, 90 and 104.
Paragraph 79, governmental funds on the current financial resources focus and modified accrual.
Paragraphs 80 through 82, general capital assets reported in the governmental activities column rather than the funds, the definition of general long-term debt, and general long-term liabilities not reported in governmental funds.
Paragraph 83, the governmental fund balance sheet format.
Paragraph 85, the four reconciling items from total governmental fund balances to net position of governmental activities.
Paragraph 86, the format and sequence of the governmental fund operating statement.
Paragraphs 87 and 88, debt issue costs reported as expenditures, and the other financing sources and uses, including proceeds of long-term debt, issuance premium or discount, payments to escrow agents for refundings, transfers, and sales of capital assets unless reported as a special item.
Paragraph 89, special and extraordinary items reported after other financing sources and uses.
Paragraph 90, the five reconciling items from the total change in fund balances to the change in net position.
Paragraph 92, proprietary funds on the economic resources focus and the accrual basis.
Paragraph 96, internal service fund combined totals presented to the right of the total enterprise funds column.
Paragraph 104, differences between total enterprise funds and business-type activities explained on the face of the fund statement or in an accompanying schedule.
Illustrations C-1, C-2 and C-3, the Sample City statements whose captions and amounts the worked reconciliations reproduce.

Other statements:

GASB Statement No. 54, the five fund balance classifications, which describe how tightly constrained a governmental fund's spendable resources are.
GASB Statement No. 63, paragraphs 6 and 7, the amendment of GASB Statement No. 34 paragraphs 85 and 90 through 92, and the presentation of deferred outflows after assets and deferred inflows after liabilities; its three components of net position describe how a full accrual entity's net position is composed.
GASB Statement No. 65, paragraphs 3, 6, 9, 10, 15, 30, 31, 32 and 33, the governmental-fund-only application of paragraph 30, the refunding difference reported as a deferred outflow or inflow of resources, and the related unavailable revenue and debt issue cost provisions.
GASB Statement No. 68, pension accounting as it reaches the reconciliations.

How PocketCPA uses these sources

Every lesson is written in original words and cites the paragraph each rule comes from. No standard's text is reproduced. How lessons and questions are written and checked is set out in our methodology.