Final answer:
The recommended format for the government-wide Statement of Activities is similar to an income statement, including expenses, program revenues, general revenues, and the total change in net position. This format helps in assessing the sustainability of government programs and overall financial health.
Step-by-step explanation:
The recommended format for the government-wide Statement of Activities is established by the Governmental Accounting Standards Board (GASB). This statement should mirror the format of a traditional income statement used in the private sector, but it is uniquely tailored to reflect governmental operations. The format typically includes the total expenses for each function or program of the government, followed by program revenues itemized into charges for services, operating grants, and contributions. Then, general revenues are listed, which are not directly linked to any specific program or function.The statement presents the net (expense) revenue for each function or program, which illustrates the extent to which each program or function is self-sustaining through its own revenues or dependent on general revenues. These are followed by general revenues, such as taxes and other non-program specific income, and finally the total change in the net position of the government is provided.Conclusion Understanding the Statement of Activities in government-wide financial reporting helps to gauge the fiscal sustainability of different government programs and the government's overall financial health. This format is essential for transparency and accountability in public financial management.