What does GASB Statement No. 34 stipulate regarding the reporting of designations?

GASB Statement No. 34 stipulates that designations should not be reported on the face of the government-wide statement of net assets. This regulation emphasizes that the primary focus of government-wide financial statements should be on overall financial position and performance rather than on specific designations of resources. Reporting designations on the face of these financial statements could potentially mislead users by presenting those designations as being more significant or impactful to the overall financial health of the government entity than they truly are.

The correct reporting approach in line with GASB Statement No. 34 helps maintain clarity and consistency in financial reporting, ensuring that the statements serve their purpose of effectively communicating the financial status of government entities to stakeholders. This practice aligns with the broader goal of enhancing transparency and understandability in financial reporting for government entities.