GASB proposal addresses irrevocable split-interest agreements

Board aims for consistency in reporting.

GASB proposed changes that are designed to reduce diversity in state and local government accounting for irrevocable split-interest agreements.

In such agreements, a donor transfers assets for the shared benefit of at least two beneficiaries, which often are:

  • A government (such as a public college or university or public health care provider).
  • Another beneficiary designated by the donor.

The donor transfers the assets to either the government or to a separate third party, such as a bank.

GASB is proposing new recognition and measurement guidance in the exposure draft, Accounting and Financial Reporting for Irrevocable Split-Interest Agreements. The proposal addresses when these types of arrangements constitute an asset for accounting and financial reporting purposes when a third party administers the resources.

In addition, the proposal seeks feedback on expanded guidance for such agreements in which the assets are held by the government.

"Irrevocable split-interest agreements can represent a meaningful source of resources for public colleges, universities, and hospitals," GASB Chairman David Vaudt said in a news release. "The board believes that the proposed guidance will lead to more consistent accounting for these arrangements, which will make the information users have access to more comparable."

Public comment is due Sept. 18 and can be submitted by email to director@gasb.org.

SPONSORED REPORT

Cybersecurity threats proliferating for midsize and smaller businesses

This report details how SMBs can properly protect private information from breaches, design and implement a cybersecurity policy, and create safeguards for training and education.

QUIZ

Test yourself on these often confused words

The spelling checker on your word processing program can do only so much to flag problems. Your best insurance is to learn the troublesome words that trip up writers and use them correctly by the standards of formal, written English.