Support Learning and Insight

It’s more important than ever to understand the challenges facing financial executives. Support the Financial Education & Research Foundation today.

Financial Reporting and Regulatory Update

Third Quarter 2019

Effective dates for all GASB statements

Effective dates for all GASB statements

 

GASB statement

Effective dates–reporting periods beginning after

 

Early adoption

Certain Asset Retirement Obligations (GASB Statement 83)

Applies when a government has legal obligations to perform future asset retirement activities related to its tangible capital assets. Under this statement,the government is required to recognize a liability and a corresponding deferred outflow of resources related to such obligations. This guidance also identifies the circumstances that trigger recognition of these transactions.

June 15, 2018

Permitted

Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements (GASB Statement 88)

Clarifies which liabilities governments should include in their note disclosures related to debt and requires that all debt disclosures present direct borrowings and direct placements of debt separately from other types of debt.

June 15, 2018

Permitted

 

GASB statement

Effective dates–reporting periods beginning after

 

Early adoption

Fiduciary Activities (GASB Statement 84)

Improves guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. Establishes criteria for identifying fiduciary activities of all state and local governments and clarifies whether and how business-type activities should report their fiduciary activities.

Establishes criteria for identifying fiduciary activities of all state and local governments focused on 1) whether a government is controlling the assets of the fiduciary activity and 2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities.

Dec. 15, 2018

Permitted

Majority Equity Interests (GASB Statement 90)

Revises and clarifies the guidance for reporting a government’s majority equity interest in a legally separate organization and improves the relevance of financial statement information for certain component units.

Dec. 15, 2018

Permitted

Leases

(GASB Statement 87)

Revises recognition and measurement for lease contracts by lessors and lessees by requiring recognition of certain lease assets and liabilities

for leases that previously were classified as operating leases and as inflows of resources or outflows of resources recognized based on the payment provisions of the contract. Establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset.

Dec. 15, 2019

Permitted

Accounting for Interest Cost Incurred Before the End of a Construction Period (GASB Statement 89)

Supersedes guidance set forth in Statement 62, “Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements,” which generally required capitalization of interest cost incurred before the end of a construction period. Statement 89 requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus and not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund.

Dec. 15, 2019

Permitted

Conduit Debt Obligations (GASB Statement 91)

Clarifies the definition of a conduit obligation and stipulates that a conduit debt obligation is a liability of the third-party obligor, not the issuer, thus eliminating the option for government issuers to recognize a conduit debt obligation as a liability. Establishes standards for accounting and financial reporting of additional commitments extended by issuers and arrangements associated with conduit debt obligations and improves required note disclosures.

Dec. 15, 2020

Permitted