News Release 03/29/16
GASB ISSUES ENHANCED GUIDANCE ON
Norwalk, CT, March 29, 2016 — The Governmental Accounting
Standards Board (GASB) today issued recognition and measurement
guidance for governments that benefit from irrevocable split-interest
IRREVOCABLE SPLIT-INTEREST AGREEMENTS
Under a typical irrevocable split-interest agreement, a donor transfers
assets for the shared benefit of at least two beneficiaries: a
government (often a public college, university, or hospital) and another
donor-designated beneficiary. The donor transfers the related assets to
either the government or to a separate third party, such as a bank.
GASB Statement No. 81, Irrevocable Split-Interest Agreements,
addresses when these types of arrangements constitute an asset for
accounting and financial reporting purposes when the resources are
administered by a third party. The Statement also provides expanded
guidance for circumstances in which the government holds the assets.
"The types of agreements addressed by Statement 81 can represent
significant resources for certain public colleges, universities, and
hospitals," said GASB Chair David A. Vaudt. "This guidance will lead to
more consistent accounting for these agreements, which will allow users
access to more comparable information about them."
The requirements of GASB Statement 81 are effective for reporting
periods beginning after December 15, 2016. The full text of the
Statement is available at www.gasb.org.
About the Governmental Accounting Standards Board
Established in 1984, the GASB is the independent, private-sector
organization based in Norwalk, Connecticut, that establishes accounting
and financial reporting standards for U.S. state and local governments
that follow Generally Accepted Accounting Principles (GAAP). These
standards are recognized as authoritative by state and local
governments, state Boards of Accountancy, and the American Institute of
CPAs (AICPA). The GASB develops and issues accounting standards through a
transparent and inclusive process intended to promote financial
reporting that provides useful information to taxpayers, public
officials, investors, and others who use financial reports. The
Financial Accounting Foundation (FAF) supports and oversees the GASB.
For more information, visit www.gasb.org.