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Conversion Worksheet—Statements of Net Assets and Activities

This worksheet provides the format, including the results of adjustments and reclassifications for each line item presented, to convert Governmental Funds financial statements to the corresponding balances for the governmental activities column in the Government-wide financial statements.

Entering Data

The line item titles for assets, liabilities, net assets, revenues and expenses should come directly from the Governmental Funds Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances. The dollar amounts for each of the line items from the Governmental Funds financial statements should be entered in the column titled “Total Governmental Funds.”
Notes:  The totals in the “Total Governmental Activities” column will not appear for a particular line item until the corresponding line item title is entered in column B. Also, non-shaded cells are intended for manual input, but cells that are not intended for manual inputs (such as cells that have formulas) have been shaded yellow to differentiate them from the input cells.
The adjustment column should be used for adjustments that are necessary to convert the governmental funds’ modified accrual basis of accounting to the governmental activities’ full accrual basis of accounting. The reclassification column should be used for reclassification and elimination entries necessary when preparing the government-wide financial statements.
Note: The auditor/accountant should prepare the necessary adjustment and reclassification entries before using this workbook.
Each line item presented includes five rows to enter the dollar amounts of any adjustment or reclassification entries that affect the line item. Thus, each line item has the flexibility of holding up to five adjustment amounts and five reclassification amounts. If more rows are needed for a particular line item, see “Inserting Additional Rows Within a Line Item” below. When entering data into the “Adjustments” or “Reclassifications” column, remember that debits should be entered as positive numbers and credits should be entered as negative numbers.
Both the total adjustments and the total reclassifications on the “Net Assets” worksheet should net to zero. For the “Activities” worksheet, only the reclassifications should net to zero. Note: The net balance of the adjustments from the “Activities” worksheet is automatically carried as an adjustment to the “fund balance/net assets” line item on the “Net Assets worksheet.”
The “Adjustment Reference” and “Reclass
If needed, this worksheet will also calculate and present a summary of reconciling items between the total fund balances and net change in fund balances reported in the governmental fund financial statements and the total net assets and change in net assets for governmental activities reported in the Government-wide financial statements. Each adjustment can be placed in one of ten categories (A through J) for each of the two worksheets presented. To do so, place the cursor in the appropriate adjustment row (where it intersects this column), click the down-arrow, and select the appropriate letter from the drop-down menu. Multiple adjustments can be placed in a single reconciliation category.
At the bottom of this spreadsheet is the reconciliation summary. There is space for you to enter the title of each reconciling category. The sum of each category will automatically calculate based on the reconciling item references (A through J) you entered in the worksheet. For example, on the “Net Assets” worksheet, the auditor/accountant may decide that the reporting of capital assets is one of the reconciling differences between the total fund balances in the Governmental Funds Balance Sheet and the net assets of governmental activities reported in the Government-wide Statement of Net Assets. Within the reconciliation area at the bottom of the “Net Assets” worksheet, the auditor/accountant should type “Capital Assets” in the non-shaded cell to the right of the “A.” Then, within the main section of the worksheet, the auditor/accountant should identify each adjustment that affected the capital asset accounts. Within the “Reconciling Item Ref” column, the auditor/accountant should place the cursor in the same row of each identified adjustment. When the cursor is placed in the cell, the auditor/accountant should click the down-arrow that appears and select “A” from the drop-down menu. The reconciliation area at the bottom of the worksheet will automatically calculate the total amount of “capital asset” adjustments identified with an “A.” The auditor/accountant would then use these totals in preparing the reconciliation portion of the financial statements.

Inserting Additional Line Items

Within the Assets, Liabilities, Revenues and Expenses sections, there are several blank line items to insert the captions from the Governmental Funds financial statements. If more line items are needed for a particular section, place the cursor in “Column B” for one of the middle line items of the section before inserting a row. See the section “General Workpaper Functionality and Tips for Entering Data” for further information concerning the tips for and potential effects of inserting and deleting workbook line items. As a final step, copy the formulas in the “Total Governmental Activities” column from an existing line item to the new line item.

Inserting Additional Rows Within a Line Item

Each line item presented includes five rows, providing the flexibility of holding up to five adjustment amounts and five reclassification amounts. If more adjustments or reclassifications are necessary for a specific line item, place your cursor on the row containing the third adjustment or reclassification before inserting a row. See the section “General Workpaper Functionality and Tips for Entering Data” for further information concerning the tips for and potential effects of inserting and deleting workbook line items.