The following are GASB's fund balance classifications. Define and give an example of each.NonspendableRestrictedCommittedAssignedUnassigned

Question

What will be an ideal response?

Answer 1

Nonspendable
Nonspendable fund balances are net assets of a fund that cannot be spent because of the terms of a trust agreement or because the assets are not cash. Examples include supplies and prepaid insurance. Also included in this category would be permanent fund principal.

Restricted
Restricted funds are those that are subject to constraints imposed by external parties or by law. Restrictions may also be result from legally enforceable requirements that resources be used only for specific purpose. An example would be proceeds of sales taxes restricted by state law for a specified purpose.

Committed
Committed funds are those that are designated as committed through ordinance or resolution by the government's highest level of authority. These constraints are not easily changed. This constraint is self-imposed. An example would be a Village board approval of a large construction contract.
 
Assigned
Assigned funds are governmental funds that the government intends to use for a specific purpose. Constraints on assigned resources are more easily changed than committed funds. An example would be a debt service fund.
 
Unassigned
Unassigned funds are in the residual category for the General Fund. This is the only category of Fund balance that can be reported as a negative number. All net assets of the General Fund that are not reported in another fund balance category are reported as unassigned.