What is the focus of the operating statement of a proprietary fund?

The operating statement of a proprietary fund primarily focuses on reporting the total economic resource changes. Proprietary funds, which include enterprise and internal service funds, are used to account for business-type activities within a government. These funds are intended to operate in a manner similar to private sector businesses, which means their operating statements provide insights into the overall economic performance of these activities.

By focusing on the total economic resources changes, the operating statement reflects a comprehensive view of all financial elements that impact the proprietary fund, including revenues, expenses, assets, and liabilities. This allows stakeholders to assess the fund's financial position over time and understand how well it is generating income or managing expenses, akin to how a business would report its profitability.

While increased or decreased resources, changes in current financial resources, and cash balance fluctuations are important aspects of financial reporting, they do not encapsulate the broader economic perspective that the operating statement aims to provide in proprietary fund accounting. By emphasizing total changes in economic resources, the statement ensures stakeholders can evaluate the profitability and financial sustainability of the fund's operations.