It identifies the extent to which each function of the government draws from the general revenues of the government or is self-financing through fees and aid coming from other governments. In the statement of activities, revenues are reported by source and expenses are reported by function. At a minimum, governments should report direct expenses for each function. Some governments may prefer to allocate indirect expenses to each function. If this option is exercised, indirect expenses must be reported in a separate column.
Depreciation is reported as a direct expense of each function.
Note in the statement of activities that expenses are reported in the first column followed by program revenues in the next three columns. The three revenue columns are followed by columns reporting the net expense or revenue for each function or program. Net expense or revenue is reported separately for governmental activities, business-type activities, and component units. General revenues are reported at the bottom of the statement of activities. GASB wanted to highlight those revenues that create this burden.