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The City of Portland, Oregon

Office of Management & Finance

Bureau of Revenue and Financial Services

Phone: 503-823-5288

Fax: 503-823-5384

1120 SW 5th Avenue, Rm 1040, Portland, OR 97204

FIN 2.05.01 Classification and Reporting of Fund Balances in Governmental Funds

CFMP Procedure


This procedure provides guidance to City of Portland staff in the classification and reporting of fund
balance in governmental funds, as required by Governmental Accounting Standards Board (GASB)
Statement No. 54. The procedure also establishes the relevant authority by which City resources are
constrained and the required action by the City of Portland to change those constraints.


I - Explanation and Examples of Fund Balance Components in Governmental Funds

In compliance with GASB 54, for financial reporting of governmental funds, the City of Portland shall classify fund balance in one or more of the following components: non-spendable, restricted, committed, assigned, and unassigned. Examples of the five fund balance components are provided below.

A. Non-spendable Funds
Non-spendable funds include assets that will never convert to cash, such as inventories or prepaid items, and assets that would not convert to cash soon enough to affect the current period. Also, nonspendable funds can be legally or contractually constrained, such as an endowment fund or revolving loan fund capital. Unless the proceeds of the following are otherwise designated as restricted, committed, or assigned; long-term loans, notes receivable, and property held for resale would also be classified as non-spendable.

B. Restricted Funds
Examples of restricted funds include, but are not limited to: amounts mandated for a specific purpose that is externally imposed, such as unspent bond proceeds, and grants earned but not spent. Also included are restrictions by laws and regulations of other governments, such as: taxes dedicated to a specific purpose and revenues restricted by enabling legislation.

C. Committed Funds
Committed funds are amounts set aside for a specific purpose by City Council. The resolution or ordinance to classify funds as committed must be completed no later than fiscal year end. Although the action to constrain resources must occur prior to fiscal year end, the specific amount to be
constrained can be determined in the following fiscal year.

D. Assigned Funds

  • General Fund. For the General Fund, the portion of ending fund balance that may be necessary to eliminate a projected budgetary deficit in the following year’s budget may be designated as “Assigned fund balance”. The City Council, or its designee, will make such assignments of fund balance when necessary. For the General Fund, the purpose of the assignment, as designated by the appropriate governing body or official, must be narrower than the purpose of the General Fund itself.
  • Other Governmental Funds. For governmental funds other than the General Fund, positive amounts that are not otherwise classified as non-spendable, restricted, or committed shall be classified as assigned funds. Amounts classified as assigned shall be appropriately identified by the specific purpose for which they have been designated by the appropriate governing body or official.

E. Unassigned Funds
All funds in this category are considered spendable resources. For the General Fund, unassigned funds are those amounts not otherwise classified as non-spendable, restricted, committed, or assigned.


II - Authority to Establish and Change Constraints on the Use of Resources

City bureaus are responsible for obtaining the appropriate level of authority to establish and/or change the constraints on the use of funds, in compliance with GASB 54 and as indicated below:

A. Non-spendable funds that are so classified due to legal or contractual constraints may only be modified or released from such designation through the level of legal action or contract clause that created the original constraint.

B. Restricted funds are amounts mandated for a specific purpose that is either externally imposed such as by creditors, grantors, contributors, or law or regulations of other governments or imposed by law through constitutional provision or enabling legislation. Funds designated as restricted can
only be modified or released from restriction in the same manner.

C. Committed funds are amounts that are set aside for a specific purpose by City Council adoption of resolution or ordinance. Funds designated as committed can only be released from commitment by City Council resolution or ordinance.

D. Assigned funds are amounts set aside for an identified purpose by the City Council in accordance with a formal budget process and with the approval of the appropriate bureau director. Funds designated as assigned can only be modified or released from restriction in the same manner.

E. Unassigned Funds

  • Unassigned funds are those amounts in the General Fund that are not otherwise classified as non-spendable, restricted, committed, or assigned. All funds in this category are considered spendable resources. Only the General Fund may report a positive amount (surplus) as unassigned fund balance.
  • For all governmental funds, other than the General Fund, a residual deficit may occur when amounts that have been expended exceed resources that have been classified as nonspendable, restricted, committed, or assigned. For the reporting of a residual deficit, it may be necessary to report a negative unassigned fund balance.


III - Stabilization Arrangements

Reserve funds that formally set aside amounts for use in emergency situations or revenue shortfalls are considered “stabilization arrangements” under GASB guidance. Stabilization arrangements should be classified as restricted or committed if they meet the criteria for such classifications, based on the source of the constraint on their use. An example of a stabilization arrangement is the authorization to use funds from the General Reserve Fund for specified purposes, when certain specific non-routine circumstances exist, as adopted by City Council resolution or ordinance. See FIN-2.07 Reserve Funds for further discussion.


The Accounting Division of the Bureau of Revenue and Financial Services, Office of Management and Finance, in coordination with the City Budget Office and the related bureaus, shall be responsible for accurate and timely classification and reporting of fund balances in governmental funds.

Related Policies and Procedures

FIN 2.05 Financial Reporting
FIN 2.04.01 Fund Statement of Purpose Requirements


Adopted September 25, 2015 by the Chief Financial Officer under rulemaking authority established in
FIN 2.02 Comprehensive Financial Management Policies Overview.