The definition of a financial reporting entity shall be
based on the concept of financial accountability. A primary objective of
authorities' and special districts' financial reporting should be to provide
users of financial statements with a basis for assessing the accountability of
their respective elected/appointed officials, responsible for the operations of
their specially created organizations. The financial statements of the
reporting entity shall provide for distinguishing between the following:
primary government, component unit, joint venture, jointly governed
organization, or another stand-alone government, by communicating such
information to the users thereof. Such selection of the financial reporting
entity shall be made by the governing body pursuant to GAAP criteria and be
presented in the entity's financial statements pursuant to GAAP reporting
standards.
