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: