NEWS RELEASE 10/10/11
GASB Proposes Technical
CorrectionsNorwalk, CT, October 10, 2011—The Governmental
Accounting Standards Board (GASB) today issued an Exposure Draft intended to
improve accounting and financial reporting for governmental financial reporting
entities by resolving conflicting guidance that resulted from the issuance of
two recent pronouncements. The pronouncements are Statements No. 54, Fund
Balance Reporting and Governmental Fund Type Definitions, and No. 62,
Codification of Accounting and Financial Reporting Guidance Contained in
Pre-November 30, 1989 FASB and AICPA Pronouncements.
Statement would amend Statement No. 10, Accounting and Financial Reporting
for Risk Financing and Related Insurance Issues, by removing the provision
that limits fund-based reporting of an entity´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 54.
This proposed Statement
also would amend Statement 62 by modifying the specific guidance on accounting
for (1) operating lease payments that vary from a straight-line basis and (2)
the difference between the initial investment (purchase price) and the principal
amount of a purchased loan or group of loans. 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 this proposed
Statement would be effective for periods ending after June 15, 2012. Earlier
application would be encouraged. Copies of the Exposure Draft, including
instructions on how to provide written comments to the GASB, may be downloaded
free of charge from www.gasb.org. The comment
deadline is December 16, 2011.
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.