GASB proposes M&A standards for government

BY KEN TYSIAC

GASB issued for public comment Friday a proposed statement that aims to improve accounting and financial reporting by providing standards for combinations and disposals by state and local governments.

Under the proposal outlined in the exposure draft, Government Combinations and Disposals of Government Operations, state and local governments would be required to:

  • Classify government combinations as mergers, acquisitions, or transfers of operations.
  • Use carrying values to determine the assets and liabilities combined in a merger or operations transfer.
  • Measure acquired assets and liabilities based on their acquisition values.
  • Provide guidance for government operations that have been transferred or sold.


Disclosures about combinations and disposals of government operations also would be required to give users of financial statements the ability to evaluate the nature and financial effects of the transactions.

In a statement, GASB Chairman Robert Attmore said state and local governments have been using accounting and financial reporting guidance intended for the business environment to account for mergers and acquisitions.

“Based on our research and feedback from stakeholders, the GASB decided to propose new guidance tailored to governmental situations and circumstances,” he said in a news release.

Comments on the ED are due June 15. The amendments would take effect for periods beginning after Dec. 15, 2013, and would be applied prospectively, with early application encouraged.

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

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