Transcript Summary of GASB Updates

Summary of GASB Updates
 Effective Dates – Recently Issued GASB
Standards
 June 30, 2012
 GASB Statement No. 64, Derivative Instruments:
Application of Hedge Accounting Termination
Provisions
Summary of GASB Updates
 Effective Dates – Recently Issued GASB
Standards
 June 30, 2013
 GASB Statement No. 60, Accounting and Financial Reporting for
Service Concession Arrangements*
 GASB Statement No. 61, The Financial Reporting Entity Omnibus,
an amendment of GASB Statements No. 14 and No. 34
 GASB Statement No. 62, Codification of Accounting and Financial
Reporting Guidance contained in Pre-November 30, 1989 FASB
and AICPA*
 GASB Statement No. 63, Financial Reporting of Deferred
Outflows of Resources, Deferred Inflows of Resources and Net
Position*
* Effective as of the previous December 31, however effective as of June 30, for the State of Illinois.
Summary of GASB Updates
 Effective Dates – Recently Issued GASB
Standards
 June 30, 2014
 GASB Statement No. 65, Items Previously Reported as
Assets and Liabilities*
 GASB Statement No. 66, Technical Corrections – 2012*
 GASB Statement No. 67, Financial Reporting for
Pension Plans
* Effective as of the previous December 31, however effective as of June 30, for the State of Illinois.
Summary of GASB Updates
 Effective Dates – Recently Issued GASB
Standards
 June 30, 2015
 GASB Statement No. 68, Accounting and Financial
Reporting for Pension Plans
Summary of GASB Updates
 GASB Statement No. 64 – Derivative Instruments:
Application of Hedge Accounting Termination
Provisions (Amendment to GASB No. 53)
 Establishes criteria as to when hedge accounting should continue
after the replacement of a swap counterparty or a swap
counterparty’s credit support provider.
Summary of GASB Updates
 GASB Statement No. 60 – Service Concession
Arrangements (SCAs)
 Public-Private Partnership in which:
 The transferor conveys to an operator the right and obligation to
provide services through the use of a facility (capital asset) in
exchange for significant consideration.
 The operator is compensated through fees from third parties.
 The transferor has the ability to determine the services provided by
the operator, to whom these services are available and the prices
charged for the services.
 The transferor is entitled to ownership or other significant residual
interest in the service utility of the facility at the end of the
arrangement.
 Examples :
 Parking Garages, Parking Meters, Roads and Bridges
Summary of GASB Updates
 GASB Statement No. 61 – The Financial Reporting
Omnibus
 Provides amendments to GASB Statement No. 14, The
Financial Reporting Entity relating to component and
blended component units:
 Increases emphasis on financial relationships (i.e. financial benefit
or burden) between the primary government and the potential
component unit when determining to include or exclude a potential
component unit within the financial statements.
 Expands the blending requirements for component units within the
primary government financial statements.
 Expands footnote disclosures emphasizing the reasons for including
a component unit.
Summary of GASB Updates
 GASB Statement No. 62 – Codification of PreNovember 30, 1989 FASB and AICPA
Pronouncements
 Primary objective is to directly incorporate the
applicable provisions in FASB and AICPA
pronouncements issued before November 30, 1989
into the state and local government accounting and
financial reporting standards.
Summary of GASB Updates
 GASB Statement No. 63 – Financial Reporting of
Deferred Outflows of Resources, Deferred Inflows
of Resources and Net Position
 Addresses presentation issues associated with the new financial
position elements created in Concepts Statement No. 4 (issued in
June 2007).
 Deferred Outflows of Resources and Deferred Inflows of
Resources should only be used as specifically required in
authoritative GASB pronouncements:
 GASB No. 53 – Derivative Instruments
 GASB No. 60 – Service Concession Arrangements
 GASB No. 64 – Items Previously Presented as Assets and Liabilities
Summary of GASB Updates
 Definitions:
 Deferred outflow of resources
 a consumption of net assets by the government that is applicable
to a future period.
 Has a natural “debit” balance and is reported similar to assets.
 Deferred inflow of resources
 An acquisition of net assets by the government that is applicable
to a future reporting period.
 Has a natural “credit” balance and is reported similar to liabilities.
 Net position
 The residual of all elements presented in a financial position
statement.
Summary of GASB Updates
Reporting Requirements
Statement of Net Position
Balance Sheet
(Government-Wide Financials)
(Governmental Fund Financials)
 Assets
 Deferred Outflows of
Resources
 Liabilities
 Deferred Inflows of
Resources
 Net Position
 Assets
 Deferred Outflows of
Resources
 Liabilities
 Deferred Inflows of
Resources
 Fund Balance
Summary of GASB Updates
 Reporting Requirements (cont.)
 Footnote Disclosures –
 Governments should provide details of different types of deferred
amounts in the notes to the financial statements if the deferred
inflow/outflow consists of multiple components on the face of the
financial statements.
Summary of GASB Updates
 GASB Statement No. 65 – Items Previously
Reported as Assets and Liabilities
 Objective is to determine whether certain transactions
previously reported as assets and liabilities should continue
to be reported as such or should instead be reported as:




A deferred outflow of resources, or
An outflow of resources (expense/expenditure), or
A deferred inflow of resources, or
An inflow of resources (revenue).
Summary of GASB Updates
 GASB Statement No. 65 – Reporting Examples
 Deferred Outflows of Resources (debit balance)
 Grants paid in advance of meeting timing requirements
 Deferred amounts from refunding of debt (debits)
 Cost to acquire rights to future revenues (intra-entity)
 Deferred loss from sale-leaseback
 Deferred Inflows of Resources (credit balance)
 Grants received in advance of meeting timing requirement
(unavailable revenue within governmental funds)
 Deferred amounts from refunding of debt (credits)
 Proceeds from sales of future revenues (GASB No. 48)
 Deferred gain from sale-leaseback
 “Regulatory” credits
Summary of GASB Updates
 GASB Statement No. 65 – Reporting Examples
 Assets
 Grants paid in advance of meeting eligibility requirements (other
than timing)
 Rights to future revenues acquired from outside the reporting entity
 Liabilities
 Derived tax revenue received in advance
 Premium revenues (risk pools)
 Grants received in advance of meeting eligibility requirements
(other than timing)
Summary of GASB Updates
 GASB Statement No. 65 – Reporting Examples
 Outflows of Resources (Expense/Expenditure)
 Debt issuance costs (other than insurance)
 Initial costs incurred by lessor in an operating lease
 Acquisition costs for risk pools
 Loan origination costs
 Inflows of Resources (Revenue)
 Loan origination fees
 Commitment fees (after exercise or expiration)
Summary of GASB Updates
 GASB Statement No. 66 – Technical Corrections –
an amendment of GASB Statements No. 10 and
No. 62
 Resolves conflicting guidance surrounding differences in
Statements No. 54 and No. 10 regarding the reporting of
risk financing activities
 Resolves differences between Statements No. 62 and No.
13 regarding the reporting of certain operating lease
transactions and No. 48 regarding the reporting of the
acquisition of a loan or group of loans
Summary of GASB Updates
 GASB Statement No. 67 – Financial Reporting for
Pension Plans & GASB Statement No. 68 –
Accounting and Financial Reporting for Pension
Plans
 Guidance relates to the accounting and financial
reporting surrounding how pension costs and
obligations are measured and reported in audited
external financial reports.
 Issued in June 2012 – Final GASB Statement to be
available in August 2012.