ANNETTE COUNTY Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds to the Statement of Activities For the Year Ended June 30, 20XX Net change in fund balances-governmental funds Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. A sale of capital assets resulted in a gain on sale reported in the statement of activities, whereas the governmental funds reported the proceeds from the sale as an other financing source. Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net position. Debt payments use current financial resources of governmental funds, but retiring debt decreases long-term liabilities in the statement of net position. Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. Some revenues reported in the statement of activities do not provide current financial resources and are not reported as revenues in governmental funds. Change in net position of governmental activities