[Lou]

I watched a Farhat lecture on reconciling ISF to Gov’t-wide. Why do we do the following entry if the ISF has made a $4500 operating profit off the general fund? Debit net position 4500, credit expenditure- general fund 4500. If we’re removing the GF’s expenditure, I’m confused by the debit to net position; why would net position be reduced? Is it so we don’t double count the ISF’s op profit? In general, if the ISF is going into the governmental activities column, wouldn’t the ISF’s op profit and the GF’s related expenditure be a wash, so there’d be no need to do anything? Thanks for reading.