Additional problems arise if the internal service fund has
significant positive (or negative) operating income. Operating
income is the excess of service revenues over the costs of
providing the service (i.e., operating expenses). Consider the case
of an internal service fund servicing police, fire, and other
vehicles used in departments reported in the General Fund. If the
internal service fund has positive operating income, the
expenditures reported in the General Fund exceed the true cost of
operating the government. If these amounts are significant over
periods of time, some of the accumulated surplus (fund balance) of
the General Fund is effectively shifted to the internal service
fund (net assets).