GASB addresses external investment pools and certain component units

Separate proposals are designed to prevent confusion and clarify presentation guidance.

GASB proposed accounting and financial reporting guidance related to external investment pools. And, in a separate exposure draft, the board proposed guidance for how certain component units should be presented in a state or local government's financial statements.

One proposal, Accounting and Financial Reporting for Certain External Investment Pools, would permit qualifying external investment pools to measure pool investments at amortized cost for financial reporting purposes.

Comments were due Aug. 31.

The other proposal, Blending Requirements for Certain Component Units, is intended to enhance existing guidance regarding the presentation of the financial reporting entity in the financial statements. The proposal would establish an additional blending criterion for financial statement presentation of component units of state and local governments.

This proposal addresses diversity in practice regarding the presentation of not-for-profit corporations in which the primary government is the sole corporate member. GASB proposes treating these component units as activities of a primary government through a financial presentation method known as "blending."

According to the board, this approach would lead to more consistent application in financial reporting and lead to increased comparability across governments. Comments are due Oct. 2.

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