MEASUREMENT FOCUS - 7430

A fund’s measurement focus relates to what is being measured or the transactions and events that will be shown in the fund’s accounting record and reported in its financial statement. The common measurement focuses are discussed below:

Current Financial Resources Measurement Focus

Governmental type funds use the current financial measurement focus to report activities. This measurement focus has the following features:

• Measures cash or assets that are expected to be converted to cash within or shortly after the accounting period.
• Measures whether the financial resources obtained during the accounting period are sufficient to cover claims against the fund during that period.
• Does not report long-term capital assets and long-term obligations.

Economic Resources Measurement Focus

Proprietary and fiduciary type funds use the economic resources measurement focus to report financial activities. This measurement focus has the following features:

• Measures all current and noncurrent assets.
• Measures all short and long-term liabilities.
• Records depreciation/amortization as a cost of operations.