ABSTRACT
Financial position—the status of a government's assets, liabilities, and residual balances at a given point in time—is undoubtedly a staple of governmental financial analysis. The commonly accepted approach to evaluating financial position is to compare a measure of a government's residual balances—its net assets or fund balance—with a measure of its annual financial activity. Net assets and fund balances, therefore, may be among the most basic and important information reported in a government's financial statements.
