In which situation is the presentation of separate government-wide financial statements REQUIRED?

The presentation of separate government-wide financial statements is a requirement for governments that engage in a variety of activities and use different fund types, reflecting the overall financial position and changes in financial position of the government as a whole, rather than focusing solely on individual fund types.

In the case of a single-program government that uses only governmental funds, there is no requirement for government-wide financial statements. Such entities typically do not have complex financial operations that would necessitate a comprehensive overview of financial data across programs. They generally rely on fund financial statements, which adequately demonstrate their financial activities.

Similarly, a single entity comprising multiple enterprise funds may have operational complexity, but the requirement for government-wide financial statements is not triggered solely by the number of enterprise funds. Government-wide statements are necessary when there is an integration of both governmental and business-type activities, or when the size and scope of operations within those enterprise funds warrant a more comprehensive reporting framework that includes the overall fiscal health of the government.

In essence, the criteria for requiring government-wide financial statements focus on the collective financial reporting that best serves users of financial statements, ensuring they have a clear understanding of the government’s financial condition and performance across all its operations. Therefore, the correct situation indicating that separate government-wide financial statements are not