The Governmental Accounting Standards Board (GASB) apparently never slows down! The past several years have seen an explosion of activity that includes significant changes to governmental financial reporting – and there is MUCH more to come! A future blog post will focus on the most recently approved pronouncement – GASB Statement No. 87, Leases, which provides guidance for lease contracts for nonfinancial assets, and is consistent with private-sector lease requirements recently approved by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). This blog post, however, is a quick peek into the current GASB agenda and the expected timelines for those projects.
The following is a brief recap of the required implementation dates of recently passed pronouncements that will affect all North Carolina local governments (this list does not include certain pronouncements that have very limited or no effect on the majority of North Carolina local governments):
GASB Statement No. 74, Financial Reporting for Postemployment Pension Plans Other Than Pension Plans
GASB Statement No. 82, Pension Issues – an amendment of GASB Statements No. 67, No. 68, and No. 73
FYE 6/30/18 GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions
GASB Statement No. 85, Omnibus 2017
GASB Statement No. 86, Certain Debt Extinguishment Issues
FYE 6/30/19 GASB Statement No. 83, Certain Asset Retirement Obligations
FYE 6/30/20 GASB Statement No. 84, Fiduciary Activities
FYE 6/30/21 GASB Statement No. 87, Leases
So, while there is certainly no shortage of our “to do” lists in the coming years, the fun will continue with some very significant projects that will have profound effects on the years after 2021 (and I have just lost a chunk of you who see this date and their retirement date!). The following is a brief recap of those timelines so that you can add to that already overcrowded “to do” list. Some of these projects have official future standard titles (as indicated in italics), while others are still identified by broad theme.
Financial Reporting Model Improvements – Governmental Funds
This major, major project has been the subject of my most recent blog posts, as follows:
You Are Doing WHAT to the Governmental Funds?? – Part 1, The Near-Term Approach
You Are Doing WHAT to the Governmental Funds?? – Part 2, The Short-Term Approach
You Are Doing WHAT to the Governmental Funds?? – Part 3, The Long-Term Approach
The timeline for this project (again, check your own retirement dates!) is relatively accelerated, especially when compared to the amount of time it took for GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments.
June – August 2017 Currently reviewing due process feedback from Invitation to Comment (written and testimonials from public hearings)
May 2018 Preliminary Views document expected
August – November 2018 Preliminary Views comment period and field tests
April 2020 Exposure Draft expected
May – July 2020 Exposure Draft comment period
August 2020 Public hearings on Exposure Draft planned
November 2021 Final Statement anticipated
This project, which will be in tandem for the most part with the financial reporting model project, is dealing with revenue recognition issues related to the current accrual-based funds and statements (e.g., proprietary and fiduciary funds, as well as the government-wide statements). Officially, the objective is to “develop a comprehensive application model for the recognition of revenues and expenses that arise from nonexchange, exchange, and exchange-like transactions, including guidance for exchange transactions that have not been specifically addressed in the current literature.” It should be noted that while the final statement is anticipated after the aforementioned financial reporting project, the implementation would probably need to be concurrent.
Currently Initial deliberations
January 2018 Invitation to Comment planned
February – April 2018 Invitation to Comment comment period
May 2018 Public hearings on Invitation to Comment
October 2019 Preliminary Views released
November 2019 – January 2020 Preliminary Views comment period and field tests
February 2020 Public hearings on Preliminary Views
April 2021 Exposure Draft planned
May – July 2021 Exposure Draft comment period
August 2021 Public hearings on Exposure Draft
June 2022 Final Statement anticipated
Capitalization of Interest Costs
This project is reconsidering the accounting and financial reporting for the capitalization of interest costs. Current guidance, that primarily only impacts the enterprise funds (and the business-type activities), is based on FASB Statement No. 34, Capitalization of Interest Cost and FASB Statement No. 62, Capitalization of Interest Cost in Situations Involving Certain Tax-Exempt Borrowings and Certain Gifts and Grants. For reference purposes, however, the guidance is incorporated into GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.
August – October 2017 Review of existing guidance
November 2017 Exposure Draft planned
December 2017 – January 2018 Exposure Draft comment period
June 2018 Final Statement anticipated
This project is actually now in Exposure Draft form, with the draft being issued just a few weeks ago on June 29th. The objective of this project is “to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements.” It will also delineate the types of liabilities that should relate to debt disclosures themselves. This project is a “fast tracker” in the sense that it is not expected to be controversial and the proposed implementation is relatively quick (FYE 6/30/19).
June 2017 Exposure Draft issued
July – September 2017 Exposure Draft comment period
March 2018 Final Statement anticipated
Equity Interest Ownership Issues
Occasionally, governmental entities have equity interests in legally separate entities. Current guidance is found in GASB Statement No. 14, The Financial Reporting Entity. This project is simply planned to consider improvements to the existing guidance.
August – November 2017 Review of existing guidance
January 2018 Exposure Draft issued
January – March 2018 Exposure Draft comment period
November 2018 Final Statement anticipated
In closing, just make sure you include me on your retirement party guest list!
