As used in this chapter, the following terms shall have the
meanings indicated:
FUND BALANCE
A governmental fund's fund balance is the difference
between its assets, deferred outflows and its liabilities and deferred
inflows.
FUND BALANCE COMPONENTS
An accounting distinction is made between the portions of
fund equity that are spendable and nonspendable. Under GASB 54, these
are broken up into five categories:
A.
NONSPENDABLE FUND BALANCEAmounts that are not in a spendable form (such as inventory) or are required to be maintained intact (such as the corpus of an endowment fund).
B.
RESTRICTED FUND BALANCEAmounts that can be spent only for the specific purposes stipulated by external resource providers either constitutionally or through enabling legislation. Examples include grants and dedicated millage.
C.
COMMITTED FUND BALANCEAmounts are constrained to specific purposes by a government itself using its highest level of decision-making authority; to be reported as committed, amounts cannot be used for any other purpose unless the government takes the same highest-level action to remove or change the constraint.
D.
ASSIGNED FUND BALANCEAmounts intended to be used by the government for specific purposes. Intent can be expressed by the governing body or by an official or body to which the governing body delegates the authority. In governmental funds other than the general fund, assigned fund balance represents the amount that is not restricted or committed. This indicates that resources in other governmental funds are, at a minimum, intended to be used for the purpose of that fund.
E.
UNASSIGNED FUND BALANCEThe residual classification of the general fund and includes all amounts not contained in other classifications. Unassigned amounts are technically available for any purpose.
UNRESTRICTED FUND BALANCE
Unrestricted fund balance includes committed, assigned and
unassigned fund balance categories. Governments may deem it appropriate
to exclude from consideration resources that have been committed or
assigned to some other purpose and focus on unassigned fund balance
rather than on unrestricted fund balance.
The various sections and provisions of this chapter shall be
deemed to be severable, and should any section or provision of this
chapter be declared by any court of competent jurisdiction to be unconstitutional
or invalid the same shall not affect the validity of this chapter
as a whole or any section or provision of this chapter, other than
the section or provision so declared to be unconstitutional or invalid.
All existing ordinances are repealed to the extent they conflict
with this chapter.
This chapter shall not take effect before the twentieth day
after its passage or before the date of its publication, whichever
occurs first, pursuant to MCL § 66.1.