Classifying Fund Balances

Reference Number: MTAS-580
Tennessee Code Annotated
Reviewed Date: September 26, 2018
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Classifying fund balances for compilance  with this standard requires governments to assess decisions made throughout the year regarding how resources are intended to be spent. Some of the steps necessary to properly classify fund balances include:

  • Determine if the government has non-spendable assets such as inventory, pre-paid expenditures or long-term receivables (due from other funds) that should be classified.
  • Locate any resolution or ordinance that earmarks a specific revenue stream or available resources for a specified purpose.
  • Identify any restrictions placed on resources by external parties such as debt covenants and state or federal law.
  • Document if authority has been given to a committee or individual to assign resources and create a list of assignments made by those parties.


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