GASB Proposes Resolution to "Conflicting Guidance"


GASB on Monday 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 the issuance of 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 exposure draft 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. Comments are due Dec. 16.

More from the JofA:

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

SPONSORED REPORT

Time to prepare for overtime changes

As an employer, trusted business adviser, or HR professional, you will need to be aware of exemption guidance, record requirements, advice for clients, and typical problems in applying overtime pay.

QUIZ

News quiz: Good news on pay and benefits for accountants

CPAs can find much to like in recent reports, including news that their expertise and skills are in such demand that pay is expected to rise and that their employers value professional certifications.

CHECKLIST

Bolster your data defenses

As you weather the dog days of summer, it’s a good time to make sure your cybersecurity structure can stand up to the heat of external and internal threats. Here are six steps to help shore up your systems.