NEWS RELEASE 04/02/12
GASB Issues Statements No. 65 and No.
66
Norwalk, CT, April 2, 2012—The Governmental Accounting
Standards Board (GASB) today issued two Statements addressing important practice
issues for state and local governments. Statement No. 65, Items Previously
Reported as Assets and Liabilities, clarifies the appropriate reporting of
deferred outflows of resources and deferred inflows of resources to ensure
consistency in financial reporting. Statement No. 66, Technical
Corrections—2012, enhances the usefulness of financial reports by resolving
conflicting accounting and financial reporting guidance that could diminish the
consistency of financial reporting.
Statement
65
GASB Concepts Statement No. 4, Elements of Financial
Statements, specifies that recognition of deferred outflows and deferred
inflows should be limited to those instances specifically identified in
authoritative GASB pronouncements. Consequently, guidance was needed to
determine which balances being reported as assets and liabilities should
actually be reported as deferred outflows of resources or deferred inflows of
resources, according to the definitions in Concepts Statement 4. Based on those
definitions, Statement 65 reclassifies certain items currently being reported as
assets and liabilities as deferred outflows of resources and deferred inflows of
resources. In addition, this Statement recognizes certain items currently being
reported as assets and liabilities as outflows of resources and inflows of
resources.
Statement 66
Statement 66 amends
Statement No. 10, Accounting and Financial Reporting for Risk Financing and
Related Insurance Issues, by removing the provision that limits fund-based
reporting of a state and local government´s risk financing activities to the
general fund and the internal service fund type. As a result, governments would
base their decisions about governmental fund type usage for risk financing
activities on the definitions in Statement No. 54, Fund Balance Reporting
and Governmental Fund Type Definitions.
This Statement also amends
Statement No. 62, Codification of Accounting and Financial Reporting
Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements,
by modifying the specific guidance on accounting for (1) operating lease
payments that vary from a straight-line basis, (2) the difference between the
initial investment (purchase price) and the principal amount of a purchased loan
or group of loans, and (3) servicing fees related to mortgage loans that are
sold when the stated service fee rate differs significantly from a current
(normal) servicing fee rate. These changes would eliminate any uncertainty
regarding the application of Statement No. 13, Accounting for Operating
Leases with Scheduled Rent Increases, and result in guidance that is
consistent with the requirements in Statement No. 48, Sales and Pledges of
Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future
Revenues, respectively.
The provisions of both Statements are
effective for periods beginning after December 15, 2012, and would be applied on
a prospective basis. Early adoption is encouraged.
For information on
ordering Statements 65 and 66, visit www.gasb.org.
About
the Governmental Accounting Standards Board
The GASB is the independent, not-for-profit organization formed in 1984 that
establishes and improves financial accounting and reporting standards for state
and local governments. Its seven members are drawn from the Board´s diverse
constituency, including preparers and auditors of government financial
statements, users of those statements, and members of the academic community.
More information about the GASB can be found at its website, www.gasb.org.