What components should be reported as other financing sources when issuing debt in a governmental fund?

When a governmental fund issues debt, both the face value of the debt and any premium received from the issuance are considered components that should be reported as other financing sources. The face value represents the principal amount that the government promises to repay upon maturity, and it is crucial for understanding the total liability incurred by the fund.

The premium occurs when the debt is issued for more than its face value, meaning investors are willing to pay more due to favorable interest rates or features associated with the debt. This premium is an essential aspect of financing as it provides additional funds that can be used for various governmental purposes.

By including both the face value and the premium in the reporting of other financing sources, the governmental fund accurately reflects the full amount of financial resources that have been made available as a result of the debt issuance. This comprehensive reporting is important for transparency and for stakeholders to understand the financial position of the governmental entity.