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FINANCIAL REPORTING

GASB impairment of capital assets, insurance recoveries standard to be reviewed

 

By Ken Tysiac
July 17, 2013

GASB’s standard regarding the impairment of capital assets and insurance recoveries will be the subject of a Financial Accounting Foundation (FAF) post-implementation review.

A FAF team will review GASB Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, according to a FAF news release. The standard provides measurement guidance for capital asset impairments.

State and local governments are required by the standard to report impairments when they occur. Before GASB No. 42 was issued in 2003, some state and local governments reported impairments as part of the ongoing depreciation expense for the capital asset, or upon disposal of the asset. GASB No. 42 also provides uniform reporting guidance for insurance recoveries of state and local governments.

Stakeholders who would like to participate in surveys on the standard can register at the FAF website.

In August, FAF expects to publish its report of a recently completed post-implementation review of two GASB standards for risk financing and insurance-related activities, including public risk pools. That review explored GASB statements No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, and No. 30, Risk Financing Omnibus.

Ken Tysiac (ktysiac@aicpa.org) is a JofA senior editor.

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