What encompasses the earmarked portion for an intended use within a budget?

The earmarked portion for an intended use within a budget is best represented by an assigned fund balance. This designation allows a government entity to indicate that a specific part of its available fund balance is set aside for particular purposes. By assigning portions of the fund balance, entities can communicate their intentions regarding future expenditures or project funding, even though these amounts aren’t legally restricted.

This practice ensures that financial resources are planned and designated for strategic priorities, which aids in transparency and accountability. Understanding the assigned fund balance is crucial for effective budgetary planning and management, particularly in ensuring that funds are appropriately allocated in line with the entity’s objectives.

The other fund balances serve different purposes; for instance, a restricted fund balance is limited for specific activities or projects per external constraints, while a committed fund balance is established by formal action of the governing body. Unassigned fund balance represents the portion of fund balance that is not assigned or restricted for any specific purpose.