Apr. 20th, 2021

Current and Upcoming GASB Pronouncements

Updated effective dates via GASB 95 (May 2020)

GASB 84 – Fiduciary Activities

Effective for reporting periods beginning after 12/15/2019 (your FY 2021)

**If not implemented in FY20, then this must be implemented beginning FY21 (7/1/2020).

This standard establishes new criteria for determining how to report fiduciary activities in governmental financial statements. The focus is on whether the government is controlling the assets, and who the beneficiaries are. Under this revised standard, certain activities previously reported in agency funds may be reclassified in future periods.

GASB 87 (and Implementation Guide 2019-3) – Leases

Effective for fiscal years beginning after 6/15/2021 (your FY 2022).  Early implementation of the standard is encouraged.

This standard establishes a single model for reporting all leases (including those previously classified as operating and capital). Lessees will now report offsetting intangible lease assets and lease liabilities equal to the present value of future lease payments. Lessors will report offsetting lease receivables and deferred inflows of resources.  *Begin gathering lease information during FY21 for FY22 Implementation!

GASB 88 – Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements

Effective for reporting periods beginning after 6/15/19 (your FY 2020).  Early implementation of the standard is encouraged.

This standard improves the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt.  It defines debt for purposes of disclosure in notes to financial statements as a liability that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is fixed at the date the contractual obligation is established.

GASB 89 Accounting for Interest Cost Incurred Before the End of a Construction Period

Effective for reporting periods beginning after 12/15/20 (your FY 2022).  Early implementation of the standard is encouraged.

This standard (1) enhances the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) simplifies accounting for interest cost incurred before the end of a construction period.  Interest cost incurred before the end of a construction period must be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund.

For more information or if you have questions, please contact our Hungerford Nichols’ Governmental Audit team members.

Adriane Schrauben, CPA, MBA – Shareholder
Marc Sawyers, CPA – Senior Manager
Michael Gruennert – Manager