Government


  GASB issued an exposure draft, Technical Corrections—an amendment of GASB Statements No. 10 and No. 62, that it said would resolve “conflicting guidance” that resulted from two recent pronouncements. The pronouncements are Statement no. 54, Fund Balance Reporting and Governmental Fund Type Definitions, and Statement no. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements.

 

The ED (available at tinyurl.com/66ftwla) contains amendments regarding the reporting of:

  • Risk-financing activities;
  • Certain operating lease transactions; and
  • The acquisition of a loan or a group of loans.

 

The proposed 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 no. 54.

 

The ED also would amend Statement no. 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.

 

The amendments would be effective for periods ending after June 15, 2012. Earlier application would be encouraged. Copies of the ED, including instructions on how to provide written comments, are available at gasb.org. The comment period closed Dec. 16.

 

 

  The Federal Accounting Standards Advisory Board (FASAB) issued a Statement of Federal Financial Accounting Technical Release (TR) that it said contains guidance that will lead to consistent accounting treatment for the disposal, retirement or removal from service of general property, plant and equipment as well as related cleanup costs.

 

The board’s TR 14, Implementation Guidance on the Accounting for the Disposal of G-PP&E, addresses important implementation questions. The TR provides implementation guidance that further clarifies existing requirements of Statement of Federal Financial Accounting Standards no. 6, Accounting for Property, Plant, and Equipment. FASAB said the implementation guidance should help differentiate between permanent and other-than-permanent removal from service of general property, plant and equipment (G-PP&E) assets. The implementation guidance also recognizes the many complexities involved in the disposal of G-PP&E, and delineates events that trigger discontinuation of depreciation and removal of G-PP&E from accounting records.

 

All FASAB standards and technical guidance are available at tinyurl.com/6z37jza.

 

More from the JofA:

 

 Find us on Facebook  |   Follow us on Twitter  |   View JofA videos

SPONSORED REPORT

How to make the most of a negotiation

Negotiators are made, not born. In this sponsored report, we cover strategies and tactics to help you head into 2017 ready to take on business deals, salary discussions and more.

VIDEO

Will the Affordable Care Act be repealed?

The results of the 2016 presidential election are likely to have a big impact on federal tax policy in the coming years. Eddie Adkins, CPA, a partner in the Washington National Tax Office at Grant Thornton, discusses what parts of the ACA might survive the repeal of most of the law.

QUIZ

News quiz: Scam email plagues tax professionals—again

Even as the IRS reported on success in reducing tax return identity theft in the 2016 season, the Service also warned tax professionals about yet another email phishing scam. See how much you know about recent news with this short quiz.