Differences Between A General Budget and A CAFR
The primary difference between a budget and a CAFR is that where the budget is a plan for the a fiscal period (often a year) primarily showing where tax income is to be allocated, the CAFR contains the results of the period (year) with previous years accumulations. A CAFR shows the total of all financial accounting that a general purpose budget reports does not. The CAFR contains a section that provides a comparison of period budget and actual. Additionally, the CAFR gives a detailed showing of investment accounts by category reflecting balances over previous years.
A Government budget document is a blueprint for a "specific grouping" of government agencies' spending over the course of an annual financial period. General Purpose Budgets contain both the spending categories of specified units of government, such as school districts, social services, transportation, police, fire, and park services; along with estimates of revenues expected to occur during the year, such as investment return; overrides of money from the previous year, and tax payments. They are usually more limited to the expected costs of running the aforementioned government operations through tax income as opposed to describing the status of any government fixed assets and investment wealth.
A CAFR is a report of the complete overall financial results of both those "specific groupings" of government agencies that appear in the current fiscal year General Purpose Budget and all other agencies and departments. These can be autonomous, enterprise (for example government or city owned golf courses), recycling, water, sewer, and financial management - often these agencies were created with the inception of that local, state or government. The CAFR provides information about all of these other government agencies that may have their own budgets and separate investment accounts but their financial holdings are not combined with the general purpose budget that the same government presents to the public. The CAFR, or as it is called in CANADA CanFR can be used along with a budget document to compare the organizations total financial standing to the annual general purpose budget. The CAFR is the complete showing of the financial investment and income records from all sources, that reflects what has developed over decades whereas a budget report is an inferior document to the CAFR being that it is primarily focused on what revenue is expected to be brought in and spent for just the year.
In contrast with the rules applying to governments, publicly traded US companies are required by the U.S. Securities and Exchange Commission (SEC), to provide their Annual Financial Report (AFR) to every shareholder each year.
Read more about this topic: Comprehensive Annual Financial Report
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