GASB Update AGFOA April, 2012. Overview Statement 61 – Reporting Entity Omnibus Statement 62 – Pre-89 FASB and AICPA Pronouncements Statement 63 – Financial.

GASB UpdateAGFOA April, 2012

OverviewStatement 61 – Reporting Entity OmnibusStatement 62 – Pre-89 FASB and AICPA

PronouncementsStatement 63 – Financial Reporting of

Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position

Statement 64 – Derivative InstrumentsStatement 65 – Elements of Financial

StatementsStatement 66 – Technical Corrections

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OtherPreliminary Views Document -

Economic Condition ReportingOMB Advance Notice

Effective For…2012

◦Statement 642013

◦Statement 61◦Statement 62◦Statement 63◦Statement 65 ◦Statement 66

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Statement 61

The Financial Reporting Entity: Omnibus

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Significant ChangesIncrease the emphasis on financial

relationshipsBlending considerationsClarify the recognition of ownership

interests in◦Joint ventures◦Component units◦ Investments

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What Does This Really Mean?Some CU’s won’t beSome CU’s will be differentFinancial vs. governanceConsider risk of being

“misleading”

Statement 62

Pre-1989 FASB and AICPA Pronouncements

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Reason for the StatementSince FASB adopted its new

codification, its original pronouncements are non-authoritative

Eliminates reference to application of pre-November 30, 1989, FASB pronouncements, unless they conflict with or contradict GASB pronouncements

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Statement 63Deferred Outflows, Deferred Inflows, and Net Position

Statement of Net Position

Deferred outflows of resources.Deferred inflows of resources. Classification – in process

Net PositionNet investment in capital assetsRestrictedUnrestricted

Disclosures

Details if not clear from face of statements.

Clarify significant impacts.

Derivative Instruments – Application of Hedge Accounting Termination Provisions – An Amendment of GASB Statement No. 53

Statement 64

Hedges and TerminationsTerminate and replaceQuestions around application of

termination provisions in GASB 53

Effective hedge remain?

Statement 65Deferrals limited to instances specifically

identified in authoritative pronouncements.

Guidance for reporting balances Reclassifies certain items as deferred

outflows of resources and deferred inflows of resources

Recognizes certain items reported as assets and liabilities as outflows of resources and inflows of resources.

SpecificsAssets Liabilities True to the definitions in

Concepts Statement 4

What Changed?Deferred gain/loss from refunding Debt issuance costsInitial direct costs of operating

leases

Major Fund CriteriaCombine assets and deferred

outflowsCombine liabilities and deferred

inflows

Statement 66Removes requirement for reporting in

General Fund or Internal Service FundAmends Statement No. 62, by modifying

the specific guidance on accounting for ◦operating lease payments that vary from a

straight-line basis, ◦ the difference between the initial investment

(purchase price) and the principal amount of a purchased loan or group of loans, and

◦servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current (normal) servicing fee rate.

PV – Economic Condition Reporting

General ideaRight place to report?

OMB Advance NoticeChange in thresholdSingle Audit LiteStreamlined audit requirementsSubrecipient monitoringCompliance still requiredComment Period through 4/30

Questions?

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Rob Moody [email protected]