Debt Service Funds

A major goal of governmental financial reporting is assessing financial performance, that is, how well the government is doing with the money entrusted to it. From the standpoint of making judgments about the performance of government funds and government finance, the financial reports are a good place to start. These reports can provide a considerable amount of the information for gauging financial compliance, success, and health. Governmental and nonprofit accounting both use the concept of …

…liabilities, revenues, or expenditures/ expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. Using the criteria established by GASB, it could be concluded that in most governments, whether local, state, or federal, debt service funds are major funds. Most governments do have long-term liabilities, and in fact, may run into financial difficulty from borrowing against their expected future tax revenues.