This goal has been adopted by GABS in its objectives of financial reporting. The idea is that governments should raise enough revenue to cover all services for a given period, generally a year. Services should not be provided that will put a burden on future taxpayers or generations. The other section is usually some sort or form of elaboration on the original word or phrase of interest. Essentially the same as liquidity .
Liquidity refers to how quick an asset can be converted to cash.
A three- month treasury note is probably more liquid than a backhoe, but probably less liquid than money in a checking account. A three- month treasury note is probably more liquid than a backhoe, but probably less liquid than money in a checking account. Bonds, pensions, and even vacation benefits are often long term items. When bonds or other debt securities are sold, there is usually a principle amount , or the amount to be paid at maturity. This is information that GASB has determined to be an essential part of financial reporting and should be reported with, but not a part of, the financial statements.