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Reporting Model (Continued) • Additional long-term focus for governmental activities. Traditional reporting for tax -supported (governmental) activities has focused on near -term inflows, outflows, and balances of spendable financial resources. The new financial reporting model retains this short-term focus in the governmental fund financial statements while providing a long-term perspective on these same activities in the government -wide financial statements. • Narrative overview and analysis. The new governmental financial reporting model provides financial report users with a simple narrative introduction, overview, and analysis of the basic financial statements in the form of management's discussion and analysis (MD&A). • Information on major funds. It is widely agreed that fund information is most useful when presented for individual funds rather than for aggregations of funds (e.g., all special revenue funds). Accordingly, the new govemmental financial reporting model presents individual fund data for each of a government's major funds. • Expanded budgetary reporting. In the past, budgetary comparisons were based solely on the final amended budget. Under the new governmental financial reporting model, information on the original budget is also presented. In addition, the new model eliminates aggregated budget presentations (e.g., totals for all budgeted special revenue funds) in favor of comparisons for the general fund and 'i each individual major fund. Infrastructure reporting. As with any major change, adoption of a new governmental financial reporting model sparked some controversy. Specifically, many preparers of state and local government financial statements generally supported the new model but were not persuaded that the proposed benefits of capitalizing and depreciating a government's general infrastructure assets (e.g., roads, bridges, dams) outweigh the related costs. Accordingly, the Govemment Finance Officers Association (GFOA) has formally taken the position that each govemment must make its own decision on whether to comply with the infrastructure reporting provisions of GASB Statement No. 34 based on its own evaluation of the relative costs and benefits of infrastructure reporting. For governments that elect to implement the infrastructure reporting provisions of GASB Statement No. 34, GFOA recommends adopting a least -cost implementation strategy consistent with the provisions of that statement. The practical application of such a strategy would reflect the following recommendations: • Limit the retroactive reporting requirements for infrastructure to major classes of infrastructure assets. • Define major classes of infrastructure as narrowly as possible. • Limit infrastructure reporting to assets acquired during fiscal years ended after June 30, 1980. • Use estimates whenever possible. • Use composite approaches to calculate depreciation expense. 7 (14) 7