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-Reserve by State Statute <br /> -Reserve for encumbrances <br /> •Unreserved <br /> -Designated - Reserved for future expenditures <br /> -Undesignated - Unrestricted Fund Balance <br /> FUND BALANCE - CURRENT STANDARD <br /> Traditional focus = Fund resources available for appropriation (budgeting) <br /> •Reserved Fund Balance = Not available <br /> •Unreserved Fund Balance = Available <br /> Reserved Fund Balance = Not available <br /> •Resources not available for spending in the current year's budget. Example: supplies <br /> inventories, encumbrances <br /> •Legal restrictions impose a limitation on purpose of the fund. Example: Reserved By State <br /> Statute <br /> •Designated Fund Balance - intended use of resources by management or governing body. <br /> Example: Future Year Expenditures <br /> WHY THE NEED FOR CHANGE? <br /> •Widespread confusion about terminology <br /> •Categories often applied inconsistently <br /> •Challenges to focus on availability for appropriation <br /> GASB 54 ESTABLISHES NEW FUND BALANCE CLASSIFICATIONS <br /> Components of Fund Balance: <br /> •Nonspendable <br /> •Restricted <br /> •Committed <br /> •Assigned <br /> •Unassigned <br /> NEW FUND BALANCE CLASSIFICATIONS <br /> Nonspendable <br /> Restricted Currently - Reserved Fund Balance <br /> Committed <br /> Assigned Currently - Designated <br /> Unassigned Essentially what is unreserved fund balance <br /> NOT SPENDABLE FUND BALANCE <br /> •Not in spendable form <br /> .Cannot ever be spent (e.g., supplies inventories and prepaid) <br /> .Cannot currently be spent (e.g., the long-term portion of loans receivables <br />