When looking at blended statements for highly segmented entities, it like lookin

Question

When looking at blended statements for highly segmented entities, it like looking at Goulash and trying to identify salt grains. While these can portray an entire government, I would argue they are far less valuable than a fund statement or discrete presentation. In business, we have a similar concept and segments that are a small percent of the total can be grouped. If you are a company like ADM, Beatrice, or GE this can lead to hiding the performance of large pieces.

When is discrete presentation required in government?

Explanation / Answer

Discrete presentation is when one or more component units are reported in separate columns after those pertaining to the primary government.

Blending is when the component units' transactions and balances are reported as if they were part of the primary government that is, the component units' funds are accounted for just as if they were funds of the primary government.

Blending is required when the primary government and the component units are controlled by governing boards having the same members or the component unit provides services solely to the primary government. If those conditions are not satisfied then discrete presentation is required.

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