Governmental Accounting Essay Example | Topics and Well Written Essays - 500 words - 2

Governmental Accounting - Essay Example A decrease in the pension plan funding implies the plan’s liabilities are more than the assets. In the short term the funds may get sufficient contributions and revenues to meet the requirement for paying scheduled benefits but this may only take some years. This may not take long and so In the long run the pension must eventually address the shortfalls. This will mean the pension plans seek more funding in order to cater for the surplus in liabilities and this most probably is in the form of increased contributions by the government. An increase in contributions by government would mean either an increase in taxes or reduction of services by the government to the citizens (Elmendorf, 2011). 2. A city manager was overheard saying, "Since we dont release them to the public, I dont see any value in taking the time to prepare interim reports." Explain why you agree or disagree with this statement. Companies prepare financial reports and issue to the public, creditors and investors in order to give a picture of the firm’s financial position and performance for specific periods. The reports therefore in my opinion give very useful information for persons external to the company; the reports generally show profitability, asset & debt positions, revenues, usage of cash as well as what the owners have invested over the period. Interim reports are prepared for time spans less than a year and can be used temporarily to analyze the firm’s financial standing until that time when consolidated yearly statements are made available. The reports are produced on a quarterly or semi-annual basis though some firms commonly give monthly reports to their creditors for purposes of securing loans. As such therefore the interim reports may not be required for reporting purposes but are important to investors, public, suppliers and more importantly banks for credit scoring reasons. I do not agree with the statement for the reasons stated above and the fact that