Rule Atlas
GASB 34: Measurement Focus & Basis of Accounting in Government
Under GASB 34 (GASB / FASAB / GAO / OMB), measurement Focus & Basis of Accounting in Government establishes the authoritative rules tested on the AGA CGFM. Differentiating current financial resources/modified accrual from economic resources/full accrual accounting for CGFM Exam 2. VoraPrep verifies every threshold, worked table, and practice question below against the current AGA CGFM blueprint.
Core Statutory Concepts
| Feature | Current Financial Resources (CFR) / Modified Accrual | Economic Resources (ER) / Full Accrual |
|---|---|---|
| What is Measured | Short-term financial assets & liabilities | All assets & liabilities (current & noncurrent) |
| When Recognized | Revenues: Measurable & Available (e.g., 60 days) | Revenues: When Earned |
| Expenditures: When liability incurred (exceptions for long-term debt) | Expenses: When Incurred (includes depreciation, long-term debt) | |
| Primary Fund Types | Governmental Funds (GRaSPP) | Proprietary Funds, Fiduciary Funds |
| Other Applications | Not applicable | Government-Wide Financial Statements |
| Key Financial Reports | Fund Balance, Revenues/Expenditures | Net Position, Revenues/Expenses |
| Focus on | Flow of current financial resources (cash & near-cash) | Operational accountability (full cost of services) |
A county's General Fund levies property taxes totaling $10 million for the current fiscal year. By the fiscal year-end, $9.5 million has been collected. An additional $300,000 of the levied taxes is expected to be collected within the first 45 days of the next fiscal year. The remaining $200,000 is deemed uncollectible. Which of the following statements most accurately analyzes this situation?
Practitioner Application: Measurement Focus & Basis of Accounting in Government
As a financial manager for a rapidly growing county, you're tasked with preparing both the general fund's budget and the financial statements for the county's new water utility enterprise. You know the CGFM exam emphasizes the distinctions, but applying the correct measurement focus and basis of accounting to each entity – and avoiding common pitfalls – is critical for accurate reporting and passing Exam 2.
- Governmental accounting employs distinct measurement foci and bases of accounting depending on the reporting entity or fund type. This fundamental distinction is crucial for understanding how financial activities are reported for state and local governments, as mandated by the Governmental Accounting Standards Board (GASB), particularly under GASB Statement 34. These concepts determine what is being reported and when it is being reported.
- Measurement Focus Measurement focus refers to what is being reported in the financial statements. It defines the scope of resources being measured.
Common AGA CGFM Distractors on GASB 34
- 1⚠️ Exam trap: Confusing 'available' (modified accrual) with 'earned' (full accrual). For governmental funds, 'earned' revenue might not be recognized if it's not also 'available' (e.g., collected beyond the 60-day window).
- 2Two Main Approaches: Government accounting uses either Current Financial Resources / Modified Accrual or Economic Resources / Full Accrual.
- 3Governmental Funds = Modified Accrual: Revenues are measurable and available (typically 60 days); expenditures are recognized when liability incurred.
- 4Proprietary, Fiduciary, Government-Wide = Full Accrual: Revenues are earned; expenses are incurred (includes depreciation, long-term liabilities).
- 5GASB 34 is the foundational standard for these distinctions.
Frequently Asked Questions: GASB 34
What is the core rule under GASB 34 (Measurement Focus & Basis of Accounting in Government)?
Under GASB 34 (GASB / FASAB / GAO / OMB), measurement Focus & Basis of Accounting in Government establishes the authoritative rules tested on the AGA CGFM. Differentiating current financial resources/modified accrual from economic resources/full accrual accounting for CGFM Exam 2. VoraPrep verifies every threshold, worked table, and practice question below against the current AGA CGFM blueprint.
How is GASB 34 tested on the AGA CGFM?
⚠️ Exam trap: Confusing 'available' (modified accrual) with 'earned' (full accrual). For governmental funds, 'earned' revenue might not be recognized if it's not also 'available' (e.g., collected beyond the 60-day window). Two Main Approaches: Government accounting uses either Current Financial Resources / Modified Accrual or Economic Resources / Full Accrual.
Where can I practice AGA CGFM questions on Measurement Focus & Basis of Accounting in Government?
Test yourself instantly with the free playable AGA CGFM question on this page, or launch VoraPrep's full AGA CGFM adaptive question bank, interactive lessons, and 1:1 exam simulator at voraprep.com/cgfm.