Which fund balance classification represents amounts for which constraints have been placed by the government's highest decision-making authority?

Which fund balance classification represents amounts for which constraints have been placed by the government's highest decision-making authority?

• A. Committed Fund Balance
• B. Assigned Fund Balance
• C. Restricted Fund Balance
• D. Unassigned Fund Balance

Answer: (A)

Committed fund balance is the portion of fund balance that is constrained by formal action of the government's highest decision-making authority. When the governing body approves a resolution or ordinance designating a specific use, those funds are set aside and cannot be used for other purposes without another formal action to modify or remove the commitment. This distinguishes it from restricted fund balance (constraints from external laws or grant agreements), assigned fund balance (constraints by designated officials for intended purposes, not the highest authority), and unassigned fund balance (the residual, not constrained).

Committed fund balance is the portion of fund balance that is constrained by formal action of the government's highest decision-making authority. When the governing body approves a resolution or ordinance designating a specific use, those funds are set aside and cannot be used for other purposes without another formal action to modify or remove the commitment. This distinguishes it from restricted fund balance (constraints from external laws or grant agreements), assigned fund balance (constraints by designated officials for intended purposes, not the highest authority), and unassigned fund balance (the residual, not constrained).