Financial Statements Of The State Of California

1567 WordsMay 2, 20167 Pages
The financial statements of the State of California convey valuable information to outside users about the State’s fiscal position and how it utilizes financial resources. The objective of this essay is to identify five things that I can ascertain about the State of California from these financial statements. One thing you can learn from the financial statements is how many legally separate entities the State of California is financially accountable for. The governmental accounting term for these entities is called component units, and when they are presented separately from the primary governmental funds, they are discretely presented as if they are a separate fund of the primary government. Component units that are not discretely…show more content…
While it is unfair to compare the magnitudes of these numbers without providing scale, it does speak to the differences in scale between California and Ohio. For Ohio, OSU represents just 39.11% of total expenses and 19.70% of total net expense for component units. More information can be found about both Universities in their respective state’s Discretely Presented Component Units Financial Statements section. To find information on the blended component units, you must review the component units section of the Overview of the Financial Statements (Government-wide Financial Statements). The blended component units include the California Public Employees’ Retirement System and the California State Teachers’ Retirement System as well as other Fiduciary component units. Since these units are blended into the primary government’s financial statements, it is harder to dissect any pertinent information from them. This represents one thing you can learn about from a government’s financial statements: how many component units it has and particular figures for any discretely presented component units. The next thing you can learn from a government’s financial statements is about its infrastructure. Typically states elect to use the modified approach for capitalizing infrastructure. Under this approach, the
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