Louisiana Administrative Code
Title 28 - EDUCATION
Part XLI - Bulletin 1929-Louisiana Accounting and Uniform Governmental Handbook
Chapter 6 - Measurement Focus and Basis of Accounting
Section XLI-601 - Explanation/General Information/Introduction/Overview

A. The information provided in this Section was extracted from the Financial Accounting for Local and State School Systems: 2009 Edition, released by the U.S. Department of Education.

B. Traditionally, the majority of governmental financial information has been maintained and reported in fund financial statements on the modified accrual basis of accounting (or the accrual basis for business-type activities). GASB Statement 34 established additional reporting (the government-wide statements) that represents a major shift in the focus and content of governmental financial statements. Collecting and reporting the additional financial information required by the government-wide statements adds to the complexity of financial reporting activities and has significant implications for the traditional focus and basis of accounting used in governmental financial statements.

C. The government-wide financial statements consist of a statement of net assets and a statement of activities and are prepared using the economic resources measurement focus and the accrual basis of accounting. Thus, revenues are recognized in the accounting period in which they are earned and become measurable, without regard to availability, and expenses are recognized in the period incurred, if measurable. (City, parish, and other local school systems annually submit audited basic financial statements which include government-wide and fund financial statements to the Louisiana Legislative Auditor's Office.)

D. Governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized in the accounting period in which they become available and measurable, and expenditures are recognized in the period in which the fund liability is incurred, if measurable, except for unmatured interest on general long-term debt, which should be recognized when due (GASB 2005a). Proprietary fund financial statements are prepared using the economic resources measurement focus and the accrual basis of accounting. (City, parish, and other local school systems are required to submit an Annual Financial Report (AFR) to the Department of Education each year. Table I of the AFR is based on fund financial statements.