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Summaries / Status Summary of Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions (Issued 02/09) The objective of this Statement is to enhance the usefulness of fund balance information by providing clearer fund balance classifications that can be more consistently applied and by clarifying the existing governmental fund type definitions This Statement establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds The initial distinction that is made in reporting fund balance information is identifying amounts that are considered non - spendable, such as fund balance associated with inventories. This Statement also provides for additional classification as restricted, committed, assigned, and unassigned based on the relative strength of the constraints that control how specific amounts can be spent 1. The restricted fund balance category includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation 2. The committed fund balance classification includes amounts that can be used only for the specific purposes determined by a formal action of the government's highest level of decision- making authority. 3. Amounts in the assigned fund balance classification are intended to be used by the government for specific purposes but do not meet the criteria to be classified as restricted or committed 4. Unassigned fund balance is the residual classification for the government's general fund and includes all spendable amounts not contained in the other classifications Governments are required to disclose information about the processes through which constraints are imposed on amounts in the committed and assigned classifications Governments also are required to classify and report amounts in the appropriate fund balance classifications by applying their accounting policies that determine whether restricted, committed, assigned, and unassigned amounts are considered to have been spent Disclosure of the policies in the notes to the financial statements is required This Statement also provides guidance for classifying stabilization amounts on the face of the balance sheet and requires disclosure of certain information about stabilization arrangements in the notes to the financial statements The requirements of this Statement are effective for financial statements for periods beginning after June 15, 2010 Early implementation is encouraged Fund balance reclassifications made to conform to the provisions of this Statement should be applied retroactively by restating fund balance for all prior periods presented