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Unit 4 Discussion: Deposit and Investment Risk Disclosures The financial reports of a governmental entity must include a disclosure of the deposit...

Unit 4 Discussion: Deposit and Investment Risk Disclosures

The financial reports of a governmental entity must include a disclosure of the deposit and investment risks that the entity faces. The Governmental Accounting Standards Board (GASB) requires disclosures on the nature of the deposit and investment risks, the governmental entities policies regarding these risks, and a description of each investment and/or exposure to interest rate or exchange rate risk.

Instructions:

Navigate to the GASB website (www.gasb.org), click on GARS Online under the Standards and Guidance tab, and log-in to the system using your FASB Codification credentials. GASB and FASB have joined together to allow academic users free basic access to the codifications of all standards. You will need to accept the terms of use if this is the first time you have accessed the Governmental Accounting Research System (GARS).

Read the summaries for GASB 3, “Deposits with Financial Institutions, Investments and Reverse Repurchase Agreements”, and GASB 40, “Deposit and Investment Risk Disclosures.”

Use Google to find the most recent annual report of your hometown.

Discuss the following with regards to your hometown government’s financial condition:

  • Describe one or two of the investments your local government has made.
  • Describe the policies your local government has for undertaking investment risks.
  • Does the government’s annual budget include funding for this type of investment?
  • Describe the disclosures that are provided for each of these investments.
  • Discuss your opinion about whether or not you feel that your local government has adequately addressed the risks, and whether or not you agree with the nature and types of investments that it has made.

Title your Post with the cash misappropriation method. Try to choose a method that has not been used more than once so that we will have some variety in our conversations.

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