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Commited fund balance and restricted fund balance discussion

What is a committed fund balance in a governmental funds balance sheet? How does it differ from a restricted fund balance?

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A committed fund balance in a governmental funds balance sheet is a special type of fund. All monies that are in the committed fund can only be used for a specific purpose as determined "by a formal action of the government's highest level of decision-making authority" (GASB, 2009). In order for the allocations in the fund to be used for any other purpose outside of the formal action that was directed by the highest level of decision-making authority, the authority must revoke the directive and modify it in writing as necessary to reflect the permitted use of the committed fund allocations. The committed fund balance reflects the current amount in the committed fund as of the date on the governmental entity's balance sheet presentation.
Committed fund balances are not subject to legal intervention for any means, including covering budget ...

Solution Summary

The solution explains what a committed fund balance is in a governmental funds balance sheet and explains how it differs from a restricted fund balance.