What does the CAFR need to include to be compliant with GAAP?

The Comprehensive Annual Financial Report (CAFR) is required to include all funds and component units of the entity to be compliant with Generally Accepted Accounting Principles (GAAP). This comprehensive inclusion ensures that the financial statements present a full and accurate picture of the government's financial position and operations.

By including all funds, the CAFR reflects the total financial resources, obligations, and results of operations for the entire entity, not just a singular aspect such as the general fund. Additionally, the inclusion of component units—entities that are legally separate from the primary government but are financially accountable to it—ensures that the CAFR provides a thorough representation of the government's financial activities and relationships.

This holistic approach helps stakeholders, including residents, investors, and oversight bodies, to make informed decisions based on complete financial information. Thus, compliance with GAAP mandates that the CAFR is comprehensive, capturing all relevant financial data associated with the government entity.