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

FEATURE

Maximizing the higher education tax credits

A counterintuitive strategy can save taxes by including otherwise excludable scholarships in gross income.

SPONSORED REPORT

Solving the lease accounting challenge

The challenges of the new lease accounting standard have been pervasive to say the least. In this free, independently-written report, you'll learn effective adoption strategies as well as resources for easing the transition to the new standard.