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):

FYE 6/30/17         GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statements 67 and 68

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:

Invitation to Comment – Or Invitation to Disaster?? The Long Slog to a New Financial Reporting Model Begins!

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


Revenue/Expense Recognition

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


Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements – and amendment of GASB Statements No. 34 and No. 38

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 EntityThis 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!