GASB Upadate given at IAPD & IPRA 2012 Annual Conference. Presented by: Frederick G. Lantz, Partner-in-Charge of Government Services for Sikich LLP
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GASB STATEMENT NO. 54FUND BALANCE REPORTING AND GOVERNMENTAL FUND
TYPE DEFINITIONS
Certified Public Accountants & Advisors
OTHER GASB STATEMENTS
• GASB S-55, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments – Issued March 2009– Effective upon issuance
• GASB S-56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards– Issued March 2009– Effective upon issuance
• GASB S-57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans– Issued December 2009, effective June 30, 2012 and thereafter– NA for Illinois Park Districts
• GASB S-58, Accounting and Financial Reporting for Chapter 9 Bankruptcies– Issued in December 2009– Effective now– Any volunteers?
• Report investment at share price or net asset value (NAV)– Rule 2a7 allows SEC-registered mutual funds to use amortized
cost rather than market value to report net assets to compute share prices• Restrictions on the types of investments held• Restrictions on the term-to-maturity of individual investments
and the dollar-weighted average of the portfolio• Requirements for portfolio diversification, requirements for
divestiture considerations in the event of security downgrades and defaults, and required actions if the market value of the portfolio deviates from amortized cost by a specified amount
GASB STATEMENT NO. 59FINANCIAL INSTRUMENTS OMNIBUS
Certified Public Accountants & Advisors
• Amends GASB S-40– Disclosure of interest rate risk should include
• Investments in debt mutual funds• Investments in debt investment pools• Other pooled debt investments
– Disclosures of interest rate risk should exclude• Investments in SEC Rule 2a7 mutual funds• Investments in 2a7 like funds (IFUNDS, IPDLAF)• NAV does not fluctuate with changing interest rates• No interest rate risk to disclose
• Applicability– Conveyance of public capital asset in exchange for significant
consideration– Operator collects fees from third parties– Transferor controls the terms of service delivery– Transferor is entitled to significant residual interest
GASB STATEMENT NO. 61DEFINING THE FINANCIAL REPORTING ENTITY
Certified Public Accountants & Advisors
GASB STATEMENT NO. 62Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30,
1989 FASB and AICPA Pronouncements
• Issued December 2010, effective for fiscal years ending December 31, 2012 and thereafter– Incorporates pronouncements issued before November 30,
1989 by the following that do not contradict with GASB Pronouncements• FASB Statements and Interpretations (SFAS 106)• Accounting Principle Board opinions (APB)• AICPA Accounting Research Bulletins
GASB STATEMENT NO. 63Financial Reporting of Deferred Outflows of Resources, Deferred
Inflows of Resources, and Net Position
Certified Public Accountants & Advisors
GASB STATEMENT NO. 64DERIVATIVE INSTRUMENTS: APPLICATION OF HEDGE
ACCOUNTING TERMINATION PROVISIONS
• Issued Modifies GASB S-53, Accounting and Financial Reporting for Derivative Instruments – Issued in July 2011– Effective for fiscal years ending June 30, 2012 and thereafter– Continuation of effective hedge after replacement of a swap
counterparty– Specifies criteria to be met to continue to apply hedge
• ED – Technical Corrections, an Amendment of GASB Statements No. 10 and No. 62– Issued October 2011, comment deadline December 16, 2011– Conflict between GASB S-10 and S-54
• GASB S-10 Insurance activities in general fund or special revenue fund
• GASB S-54 definition of a governmental funds– Tort fund meets the definition of a special revenue fund
– Solution follow GASB S-54– Status as of January 3, 2012
• Redeliberate in January 2012• Review preballot draft February 2012• Review ballot draft and vote on final statement March 2012
• ED – Accounting and Financial Reporting for Pensions, an amendment of GASB Statement No. 27– Issued June 2011, comment deadline October 15, 2011– Current pension accounting
• Accounting liability only if you don’t fund what the actuary recommends
• ED – Accounting and Financial Reporting for Pensions, an amendment of GASB Statement No. 27– Problem
• Budget friendly, modified accrual basis• Accrual basis, liability when earned by employee• Lack of comparability due to choices of actuarial valuations and
assumptions • Not recognizing spikes, cost of retro benefits or true cost of
• ED – Reporting Items Previously Recognized as Assets and Liabilities– Issued August 2011– Comment deadline November 2011– Continuation of GASB S-63
• Previously reported as assets or liabilities• Deferred outflow of resources or outflow of resources• Deferred inflow of resources or inflow of resources
• PV – Economic Condition Reporting: Financial Projections – Projections of the total cash inflows and major individual cash
inflows, in dollars and as a percentage of total cash inflows, with explanations of the known causes of fluctuations in cash inflows
– Projections of the total cash outflows and major individual cash outflows, in dollars and as a percentage of total cash outflows, with explanations of the known causes of fluctuations in cash outflows
– Projections of the total financial obligations and major individual financial obligations, including bonds, pensions, other postemployment benefits, and long-term contracts, with explanations of the known causes of fluctuations in financial obligations