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Honorable Mayor and Members of the City Council <br />City of Link Lakes <br />Page 6 <br />Reporting Model (Continued) <br />• Fund Perspective Financial Statements - These financial statements will be similar to current <br />— financial statements with modified accrual basis of accounting for governmental funds, accrual <br />basis of accounting for business type activities (formerly enterprise and intemal service funds). <br />However, the GASB has proposed a new definition for fiduciary funds and the elimination of the <br />account groups. <br />• Entity -wide Perspective Financial Statements - These financial statements will include full accrual <br />accounting for all activities. A statement of activities using the net program cost format will replace <br />the income statement. Additionally, capital use charges (depreciation) on general fixed assets and <br />infrastructure assets will be required to be reported in the financial statements. <br />• Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) - <br />The MD&A letter will be similar to (although will not replace) the current letter of transmittal. <br />Currently, Securities and Exchange Commission (SEC) regulations require private sector <br />registrants to provide a MD&A letter discussing financial conditions, results of operations, etc. <br />— <br />