Cities that do not keep fixed asset records will have more problems with the infrastructure reporting requirements. Audit reports do not always reflect the lack of general fixed asset records, so it is difficult to determine how many Kentucky cities fall in this category. The addition of infrastructure increases the balances for capital assets and may create adverse audit opinions for cities that do not report capital assets. DLG should analyze city audit reports to determine how many cities will need additional assistance for reporting capital assets. The fund reporting section of the Statement 34 annual report will look much like the fund statements in the current model, with one important exception.
Governments can also include any other fund they feel is significant for separate reporting.
This narrative discusses important financial issues and explains significant changes in program operations and financial condition. Statement 34 adds a requirement for this narrative to be included with the basic financial statements. GASB's requirements are general in nature and intended to provide a brief, concise analysis of the current financial picture, a comparison with the previous year, and the impact of changes in the local economy. Other requirements of Statement 34 will change the methods that cities use to prepare annual reports, but much of the information is already required for GAAP accounting. However, we have some time.