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<br />H.B. No. 2365 <br />extent an entity is reported on the financial statement of the <br /> <br />state or a political subdivision as a component unit, the statutory <br /> <br />accounting principles and reporting standards in this chapter apply <br /> <br />to that entity. <br /> <br />[Sections 2264.003-2264.050 reserved for expansion] <br /> <br />SUBCHAPTER B. FINANCIAL ACCOUNTING AND REPORTING STANDARDS <br /> <br />Sec. 2264.051. REQUIREMENTS FOR SYSTEM OF ACCOUNTING AND <br /> <br />REPORTING. <br /> <br />The system of accounting for and reporting the <br /> <br />financial activities of this state and its political subdivisions: <br /> <br />(1) must be consistent with state financial laws; <br /> <br />(2) may not misrepresent the nature, scope, or duration <br /> <br />of the financial activiti~s of the state or political subdivision; <br /> <br />and <br /> <br />(3) must follow the statutory standards in this chapter <br /> <br />when other accounting bases conflict with state law. <br /> <br />Sec. 2264.052. STATUTORY MODIFIED ACCRUAL BASIS. <br /> <br />(a) <br /> <br />A <br /> <br />statutory modified accrual basis is a comprehensive basis of <br /> <br />accounting that recognizes revenue when it is measurable and <br /> <br />avaiiable <br /> <br />to <br /> <br />finance <br /> <br />current <br /> <br />expenditures <br /> <br />and <br /> <br />recognizes <br /> <br />expenditures when they are normally expected to be liquidated with <br /> <br />current financial resources regardless of when they mature. <br /> <br />(b) This state and its political subdivisions may account for <br /> <br />and report selected types of financial activities on a statutory <br /> <br />modified accrual basis for government-wide and fund-level internal <br /> <br />and external financial statement reporting. <br /> <br />j:; <br /> <br />Page -2 - <br />