Comprehensive Annual Financial Report Briefing

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Comprehensive Annual Financial Report Briefing Abstract
The City of Detroit, founded in 1701, and incorporated in 1806, is in Wayne County, State of Michigan. Detroit is on an international waterway, which connects by means of the St. Lawrence Seaway to seaports around the world. Existing as the largest city in the State of Michigan, Detroit is notorious for its tradition in automotive and is a colloquialism for the automobile industry in the United States. Detroit is also known for its popular music legacies, which residents celebrate in several familiar nicknames, Motor City, Motown or simply the “D.” In a city, whose population is likely at 951,270, Detroit is also known for its liquor distribution during the prohibition in 1920.
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Exclusion of component units alters the state’s financial statement in such a way that it would present misleading or incomplete ("Office of Financial Management", 2012).
Just for clarity, according to "Governmental Accounting Standards Board" (2013), the financial reporting entity consists of (a) the primary government; (b) organizations for which the primary government is financially accountable; and (c) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity 's financial statements to be misleading or incomplete (Summary of Statement No. 14 The Financial Reporting Entity (Issued 6/91)).
With that in mind, governments are likely to construct separate legal entities to perform governmental duties. For example, the City of Detroit has nine legally separated organizations, which make up their component units. For instance, the Economic Development Corporation, and Museum of African American History are two of the nine component units included in the government reporting Comprehensive Annual Financial Report - City of Detroit. (2010).
Considering reporting entities, the Statement of Financial Accounting Standards No. 94 best defines and prescribes the recommended treatment. For example, the Statement of Financial Accounting Standards prescribes that consolidated reporting is the only appropriate method to report.

Management Discussion & Analysis (MD&A)
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