Blending and discrete presentation are two distinct methods used in government financial reporting to incorporate the financial information of component units into the primary government's financial statements, as defined by the Governmental Accounting Standards Board (GASB). Through the pronouncements of the GASB website we could navigate to uncover the descriptions of these two terms, in order to distinguish them both from each other.

Blending Presentation:

In blending presentation, the financial information of a component unit is combined with that of the primary government in its financial statements.

This approach is typically used when the component unit is so intertwined with the primary government that it is essentially considered an integral part of it.

Conditions for blending include:

The primary government has operational responsibility for the component unit.

The primary government's governing body has the ability to impose its will on the component unit, or the component unit is fiscally dependent on the primary government.

Discrete Presentation:

Discrete presentation involves reporting the financial information of a component unit in separate, stand-alone financial statements alongside those of the primary government.

This method is employed when the component unit is more like a separate entity and doesn't meet the criteria for blending.

Conditions for discrete presentation include:

The component unit has a separate elected governing body.

It is financially autonomous and not financially dependent on the primary government.

The determination of whether to blend or present discretely depends on the specific circumstances and relationships between the primary government and its component units. GASB standards provide guidance on making these decisions to ensure transparent and accurate financial reporting.