The annual comprehensive financial report (ACFR) should include a statement of revenues, expenses, and changes in fund net position for which fund type?

• A. Proprietary funds
• B. Governmental funds
• C. Fiduciary funds
• D. All funds

Answer: (A)

The statement of revenues, expenses, and changes in fund net position is presented for funds that operate on the accrual basis and function like private enterprises within the government, i.e., proprietary funds (including internal service funds). These funds measure economic activity—revenues earned and expenses incurred—and show how that activity changes the fund’s net position during the period. That format reflects the ongoing business-type nature of these funds and aligns with the full accrual accounting used in the government-wide statements.

Governmental funds, by contrast, use a different presentation focused on current financial resources, so they present a statement of revenues, expenditures, and changes in fund balances rather than changes in net position. Fiduciary funds have their own presentation as changes in fiduciary net position, not a statement titled as revenues, expenses, and changes in fund net position. Therefore, the best match for a statement titled revenues, expenses, and changes in fund net position is the proprietary funds.