The governmental non-profit organization is the institution that does operate in a particular nation being run and managed by the sitting governing body as they undertake their responsibilities yet they are not profit-oriented or centered. Their resources are usually financed by the government though they do not give returns that can be accounted as the gains out of the invested resources. Michael (2002) says the non-profit organization does not really give their additional finances to any of the shareholders or the sole owners of the organizations, they on the other hand use the money to finance their efforts to pursue other goals of their own motives. Some of the commonly known non-profit organizations are charitable institutions and trade unions. The governmental non-profit organization solely do exist with the aim of creating services and availing them to the needy for their own self-gain, these organizations are able to earn some surplus but this is not given out but its retained for the organization self-sustainability and future plans of growth and expansion and some of the institutions do use this money to reward their micro corporate leaders The non-profit organizations do major on effectively managing its internal forces, results in accountability and the performance of different divisions monitoring to ensure that they realize benefits from their capital base and the members of staff. Non-governmental not-for-profit organization, on the other hand, are the institutions that are legally in existence and which are put in place by the legal persons and which has no governmental representation or participation. Some of the non-governmental institutions are fully or partially funded by governments but they still have to maintain their strategies concerning the governing body membership with the organization (Wilson & Kattelus, 2003). Non-governmental non profit organizations are definable as the civil society organizations under various jurisdictions which operate without the core aim of making profits but some do work as lobbyists and others have the primary reason of conducting services and programs.
According to Michael (2002), the external users of the state and local government financial reports do primary undertake the total net resources are then divided into three consortiums of the capital asset in speculation, the related debt net, the confidential net assets, and the unrestricted net assets. the responsibility of assessing the performance of any of the financial reporting entities. These external users of the information do have the mandate to check whether these entities do meet the performance targets and specifications as per the requirements of the citizens and the readers of the financial documentation. Thus the Governmental Accounts Standards Board has to focus on availing of the information that does meet the need of the user of the financial statements and they could either do this through the use of an all-round yearly financial report or through the use of other types of subsequent reports. According to Paul (2003) the external users of the financial reports do assess the effectiveness and efficiency that resources are being utilized by the governmental bodies as they try to maintain the lifestyle of its citizens. The external users of information do make a follow up of the way the bodies held responsible for the making of the citizens’ life simplified and favorable have been using the resources allocated. The effectiveness achieved from this is what concerns the use of the financial statements when accessing the utilization of the resources.
The external user of the state and local government financial reports basically has the aim of trying to fully assess the performance of the government. For this to be done more effectively ,SEA reporting as per the Governmental Accounts Standards Board specification is vital and the information attained is used to for accountability assessment and in the making of informed decisions. For the external parties to be able to assess the utilization of the resources it does also need the information concerning the services provision outputs and results, the focusing on the many measures of inputs, out puts and the results, the external users of the report are at a better place to ensure that they get the real picture of the matter. The external users of the documentation are given the chance to actively contribute to the development and the measurement of the procedures that are used by the state and local governments and due to the wide grouping of the services provided by the entities then the GASB is not at a point of determining the related metrics and as a result the external users of this information could give their contribution on the issues which is fuelled by their reading of the documents. On the other hand, Paul (2003) says the Comprehensive Annual Financial Report(CAFR) is a financial document that the government produces at the end of a financial year and this statement goes beyond the public sector minimums as established by the national council on the government accounting. The comprehensive annual financial report do comprise of the introduction, the financial and the statistical parts as the main sections. This is a document that is set up, with the aim of showing in an holistic perspective of the financial outcomes of all the involved parties both in an autonomous and in a budget perspective and the whole of the finance management units which have been brought up ever the creation of the particular local government an this has to be a conjunction of the general purpose budget of the currently operating fiscal year. A comprehensive annual financial report is able to be counter checked along with the budgetary document for the sake of comparing the financial position of the general purpose twelve-monthly budget with the other documents as a whole (Wilson & Kattelus, 2003).. This is a document that depicts that the basic of all the financial cashiering general purpose budgets reporting and it should not cause any confusions between the Rainy day funds which is one among the various types of the governmental accounts on investments that are tare ken care of in the budget reports and the processes. The Governmental Accounting Standards Board Statements also are some financial credentials reporting styles that are formulated to the accounting principles that are accepted by the states and the local government as the most powerful and authoritative documents. Governmental Accounts Standards Board is the body that has the responsibility of having to set out the generally accepted principles for the local government and the states as well. The unit do avail the metric through which the assets of the states should be reported.
Combined financial statement for a government entity refer to the statement of finance that does bring the assets, liabilities,networth and the operating figure of at least two or more of the affiliate states. According to Warren (2004) the statement does contain columns that do show each of the states on individual basis and a column that does offset the intercompany business and the resulting statement of finance. Such a statement does give a quick and easy way of reviewing of the status currently of the various types of the financial statements. The statement is a combination that does include the information such as all sorts of assets and the balances of accounts. On the other hand the Basic Financial Statements are the individual statements of finance that do play the role of making a break through to the units of local government as a single entity. The basic financial statements concepts involves the accounting equation and the double entry posting and credit and debits, under the same classification the local government balance sheet ant the income statement are shown and this is a statement of finance that does reconcile investment and capital accounts of a subsequent unit (Wilson & Kattelus, 2003).Economic measurement focus is the type of measurement where all of the organization assets and liabilities associated with the operation of the propriety finances ,non expendable trust funds and the internal service financing are accounted for in the statements of net assets. The overall total net assets are then subdivided into three categories: principal asset invested and the associated net debt, the restricted, and the unrestricted total net assets. This type of measurement does use the propriety funds, on expendable trust funds and the internal service funds. Current financial measurement focus on the other hand is a system whereby all of the governmental funds and trust expendable funds are taken care of. Under such a measurement focus only the current asset (GASB) also are the financial documents reporting styles that are formulated to the accounting principles that are accepted generally. Current financial measurement focus does cater for the governmental funds and the expendable trust funds. According to Warren (2004) the measurement focus in addition, does refer to the phenomenon that is being measured whereas the basis of accounting explains when the revenues and expenditures are legible for recognition in the various accounts reporting made in the statements of finance.
Wilson & Kattelus. (2003). Accounting for Governmental and Nonprofit Entities. McGraw-Hill: Academic press.
Paul, A. C. (2003). Essentials of Accounting for Governmental and Not-for-Profit Organizations. McGraw-Hill New Yolk: The Guilford Press.
Warren. R. (2004), Wiley GAAP for Governments: Interpretation and Application of Generally Accepted Accounting Principles for State and Local Governments. Minneapolis, MN: Free Spirit Publishing.
Michael, H.G. (2002).Government and Not-for-Profit Accounting. London UK: Oxford publishers.