GASB Pursues Transparency in Proposals on Service Concession Arrangements, Financial Instruments

GASB issued two exposure drafts of proposed statements, Accounting and Financial Reporting for Service Concession Arrangements and Financial Instruments Omnibus, which are intended to increase transparency.


The exposure draft on service concession arrangements (SCAs) would set accounting and financial reporting requirements for partnership arrangements between governments and private entities and multiple governmental entities. In an SCA, the government (the “transferor”) conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a “facility”), and the operator collects fees from third parties. Examples of SCAs include long-term arrangements with toll roads.


The proposal provides guidance on whether the transferor should report the facility subject to the SCA as its capital asset, and reporting guidance for addressing upfront or installment payments related to the SCA. It also provides reporting guidance for governments acting as operators in an SCA.


The exposure draft on financial instruments is intended to update and improve standards regarding financial reporting and disclosure requirements of some financial instruments for which significant issues have been identified in practice. The amendments would:


  • Extend the use of fair value measurement to unallocated insurance contracts to improve the consistency of reporting by pension and other postemployment benefits ( OPEB) plans.
  • Emphasize the applicability of SEC requirements to certain external investment pools—known as 2a7-like pools—to provide practitioners with improved guidance.
  • Limit interest rate risk disclosures for investments in mutual funds to bond mutual funds to eliminate disclosures that may not provide decision-useful information.
  • Address the applicability of Statement no. 53, Accounting and Financial Reporting for Derivative Instruments , to certain financial instruments to clarify which financial instruments are within the scope of that standard and provide greater consistency in financial reporting.


The exposure drafts, and instructions on submitting written comments, can be downloaded from the GASB Web site. Written comments on Accounting and Financial Reporting for Service Concession Arrangements are due Sept. 30, and a public hearing on the proposal is scheduled for Oct. 6. Written comments on Financial Instruments Omnibus are due Oct. 30.


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