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10/25/2016
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Government Finance Officers Association
November 3, 2016 & December 1, 2016
2016 Annual Governmental GAAP Update
Program Overview
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Topics
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I. Final GASB Statements GASB 78 – Pensions Provided through Certain Multiple-Employer
Defined Benefit Pension Plans
GASB 79 – Certain External Investment Pools and Pool Participants
GASB 80 – Blending Requirements for Certain Component Units
GASB 81 – Irrevocable Split-Interest Agreements
GASB 82 – Pension Issues
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Topics (cont.)
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II. GASB Exposure Drafts Fiduciary activities Asset retirement obligations Leases Certain debt extinguishment issues Omnibus
III. GASB Implementation Guidance Update—2016
IV. Update on Reporting Model Review
V. Reporting Deficiencies
VI. GASB Technical Agenda
Final GASB Statements
Part I
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Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans
GASB Statement No. 78
FYE 12/31/16 (early application encouraged)
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Overview Challenge Employers in cost-sharing plans where neither the plan itself
nor most of its participating employers are governmental entities Difficult or impossible to obtain information to comply with GASB 68
Resolution Remove from scope of GASB 68 Provide a different approach
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Criteria to qualify Plan not a state or local pension plan
Plan provides benefits to employees of nongovernmental employers
No single government/governmental employers in the aggregate predominant
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Financial reporting Use pre-GASB 68 guidance for cost-sharing plans Pension expense/expenditure = employer contributions
associated with the period Even if billed in a subsequent period
Employer liability limited to unpaid contributions
Required supplementary information (RSI) Required contributions (ten most recent years)
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Note disclosure
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Name of the pension plan
Entity that administers the plan
Identification as a cost-sharing plan with requisite private-sector characteristics
Whether the pension plan issues a publicly available financial report and how to obtain it
Brief description of benefit terms, including: Number of government employees covered Types of benefits provided Authority for establishing/amending benefits
Note disclosure (cont.)
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Contribution requirements Basis for determining employer contributions Authority for establishing and amending Required contribution rates Dollar amount of required employer contributions Expiration date of collective-bargaining agreement Minimum contributions required for future periods by
collective-bargaining agreement(s), statutory obligations, or other contractual obligations
Whether employer is subject to any provisions regarding withdrawal from the pension plan
Note disclosures (cont.)
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Information about employer payables Balances if not otherwise identifiable Significant terms Description of what gave rise to the payables (e.g., related to
past service upon entrance into the arrangement)
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Certain External Investment Pools and Pool Participants
GASB Statement No. 79
FYE 6/30/16 (earlier application encouraged)Additional 6 months (certain credit risk requirements)
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Background
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Money-market mutual funds Traditionally allowed to use amortized cost Fair value normally approximates amortized cost
Traditional criteria = SEC 2a7
Challenge Continued use of SEC Rule 2a7 no longer practical
Resolution
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Set specific GASB criteria to replace SEC Rule 2a7 When a pool is allowed to report all of its investments at
amortized cost When participants in a pool are allowed to report their
participation in the pool using a net asset value (NAV) based on amortized cost
Six criteria (see following slides) Significant noncompliance disqualifies for period Return to amortized cost = change in accounting principle
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Six criteria for a pool to qualify1. Stable net asset value (NAV) per share
2. Portfolio maturity Remaining maturity 397 daysWeighted average maturity 60 days Takes into account maturity shortening features
Weighted average life 120 days Ignores maturity shortening features
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Criteria to qualify (cont.)
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3. Portfolio qualityHighest category of short-term credit rating
4. Portfolio diversification Single issuer 5% total assets
Criteria to qualify (cont.)
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5. Portfolio liquidity Definitions Illiquid = beyond 7 business days
Weekly liquid = within 5 business days
Daily liquid = within 1 business day
Requirements When acquiring illiquid security
Liquid must remain 95% total assets When acquiring any security
Daily liquid must remain 10% total assets
Weekly liquid must remain 30% total assets
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Criteria to qualify (cont.)
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6. Monthly calculation of a fair value shadow price Deviation > 0.5% price/share = disqualification for use of
amortized cost
Disclosure requirements – pools and participants
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Any limitations or restrictions on participant withdrawals Notice periods Maximum transaction amounts Pool’s authority to impose liquidity fees or redemption gates Redemption gate: limitation on redemptions for a short period of time
Liquidity fees: A fee levied on investors that wish to redeem shares in times of stress
Blending Requirements for Certain Component Units
GASB Statement No. 80
FYE 6/30/17 (earlier application encouraged)
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Background Situation Legally separate entities that are component units Governing body comprises Representatives of the community
Primary government as sole corporate member
Typically have not qualified for blending Not the same board Services not (almost) exclusively provided to government Primary government not responsible for all debt
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Challenge and solution Theory Blending should be used if a component unit functions
essentially as part of the government Certainly the case if the government is the sole corporate member
Solution Establish an additional criterion for blending Unit incorporated as not-for-profit corporation (but not included based
on GASB 39), and
Primary government is sole corporate member
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Irrevocable Split-Interest Agreements
GASB Statement No. 81
FYE 12/31/17 (earlier application encouraged)
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Background
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Description of a “split-interest” arrangement Donor transfers resources to an intermediary to administer for a
period of time (term) for the unconditional benefit of a government and some other beneficiary
Intermediary Government Some other party
Term based on Specific number of years (period-certain term) Lifetime (life-contingent term)
Background (cont.)
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Two types of “split interest” Benefit over the term of the agreement Lead interest
Benefit upon termination of the agreement Remainder interest
Background (cont.)
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Example – Alumnus donates retirement portfolio to university in return for a lifetime annuity Alumnus = lead interest Annuity during lifetime
University = residual interest Ownership of portfolio
CalculationTotal resources
Less Lead interest (at settlement amount)Remainder interest
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Four possibilities
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GOVERNMENTINTERMEDIARY
SOME OTHER INTERMEDIARY
LEAD INTEREST BENEFICIARY
A C
REMAINDERINTEREST
BENEFICIARYB D
Government is intermediary (A&B)
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Timing of recognition by government Agreement executed and
Assets received
Elements recognized Asset for donated resources Liability to third party (= “split” interest) Deferred inflow of resources (= government’s share)
Changes in value of assets – direct adjustment Asset Liability/deferred inflow
A. Lead interest beneficiary
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Statement of position Asset for donated resources Liability to remainder interest beneficiary Deferred inflow for government’s lead interest
Statement of resource flows Revenue for beneficial interest applicable to period
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B. Remainder interest beneficiary (life-interest in real estate)
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Statement of position Donated asset (investment or capital asset) If capital asset, reduce value for consumption during term by an
adjustment to deferred inflow of resources
Liability for legal obligation to sacrifice resources (future insurance, maintenance, or repairs)
The continued right to use the asset is not a liability
Deferred inflow of resources for the difference
Statement of resource flows Revenue for beneficial interest at termination
B. Remainder interest beneficiary (other than life-interest in real estate)
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Statement of position Liability to lead interest beneficiary Deferred inflow for government’s remainder interest
Statement of resource flows Revenue for beneficial interest at termination If actual residual amount exceeds deferred inflow
Gain (accrual)
Revenue (modified accrual)
Some other intermediary (C&D)
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Timing of recognition by government Sufficient information to measure the government’s beneficial
interest The government is specified by name as beneficiary
The agreement is irrevocable
The donor has not granted variance power to the intermediary
The donor does not control the intermediary
The agreement establishes a legally enforceable right for the government
Elements recognized Asset (fair value) Deferred inflow of resources
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C. Lead interest beneficiary
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Statement of position Asset Deferred inflow of resources
Statement of resource flows Revenue for beneficial interest applicable to the period
D. Remainder interest beneficiary Statement of position Asset Deferred inflow of resources
Statement of resource flows Revenue for beneficial interest at termination
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Pension Issues
GASB Statement No. 82
FYE 6/30/17* (earlier application encouraged)*Later for one provision in some limited circumstances
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Three issues
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Measure of payroll
Selection of assumptions
Classification of employer-paid member contributions
Measure of payroll
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Replace covered-employee payroll with covered payroll Covered-employee payroll (total compensation of covered
employees) Even if a portion is not relevant to employer contributions
Covered payroll (portion of payroll on which contributions are based) “Pensionable payroll”
Selection of assumptions Actuarial assumptions cannot deviate from Actuarial
Standards of Practice (ASOPs)
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Classification of employer-paid member contributions
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Classified like similar forms of compensation other than pensions (fringe benefits)
Question 1Which of the following amounts should be included as part of the calculation of pension expenditures for employers associated with private-sector cost-sharing plans?
A. Related to the period and paid then
B. Related to the period and billed, but not yet paid
C. Related to the period, but not yet billed
D. All of the above
E. Both A and B
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Question 2A pool that significantly fails to comply with the criteria of GASB 79 in a given period is not permitted to use amortized cost in future periods.
A. True
B. False
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Question 3If a pool’s portfolio has $10,000 in assets (all liquid), what would be the maximum amount of illiquid assets it could acquire without disqualifying itself from using amortized cost accounting for all of its portfolio?
A. $0
B. $500 (95% of $10,000)
C. $526*
*$10,000/.95 = $10,526; $10,526 - $10,000 = $526
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Question 4Which of the following statements is true if a primary government is the sole corporate member of the board of not-for-profit component?
A. Blending is mandatory
B. Blending is optional
C. Blending is prohibited
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Question 5Which of the following is true in connection with the government’s interest in life-interest real estate?
A. The asset should not be reduced for consumption until the end of the term
B. A liability should be recognized for the right to use the asset
C. Both A and B
D. Neither A nor B
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Question 6Under GASB 82, which measure of pay should be used as a point of reference for required supplementary information regarding pensions?
A. Covered payroll
B. Covered-member payroll
C. Either A or B
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GASB Exposure Drafts
Part II
First Section
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Fiduciary activities
GASB Exposure Draft (12/15)Proposed effective date: FYE 12/31/18
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Background Issues
I. Proper use of fiduciary fundsII. Fiduciary fund typesIII. Liability recognitionIV. Level of detail – additions and deductions
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I. Proper use of fiduciary funds
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Component units that are fiduciary in nature
Control + postemployment benefit plan assets Most defined contribution plans would not meet this criterion
Control + two additional criteria
Control
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Two possibilities The primary government holds the assets or The government has the ability to direct the use, exchange, or
employment of the assets
Clarifications Direct = designate a third party to perform a government’s
fiduciary duties without assuming them Unaffected by restrictions on use
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Two additional criteria
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1. The assets are not derived solely from the government’s own-source revenue and
2. One or more of the followingA. Nature of arrangementB. Identity of beneficiariesC. Pass-through grants
2A. Nature of arrangement
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Administered through trust or equivalent agreement
Government itself not a beneficiary
Assets dedicated to providing benefits to recipients
Assets legally protected from the creditors of the government
2B. Identity of beneficiaries
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Individuals not required to be Residents Recipients of the government’s services
Organizations or other governments not Part of the financial reporting entity Recipients of the government’s goods or services
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2C. Pass-through grants
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Provided the government does not have administrative or direct financial involvement in the program
Summary
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Component units that are fiduciary in nature
Control + postemployment benefit plan assets
Control + not own-source revenue + either Nature of arrangement, or Identify of beneficiaries, or Pass-through grant
SUMMARY CHART
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CUFIDUCIARYIN NATURE
CONTROL
PENSIONOR OPEB
PLAN ASSETSNOT OWN-SOURCE REVENUE
NATURE OF ARRANGEMENT
IDENTITY OF BENEFICIARIES
PASS-THROUGH
GRANTS
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II. Fiduciary fund types
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Replace agency funds with custodial funds
Trust funds vs. custodial funds Trust funds Nature of arrangement criterion met
Custodial funds (replace agency funds) Nature of arrangement criterion not met
Fiduciary fund types (cont.)
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Trust funds Pension (and other employee benefit) trust funds Employee benefit plans
Contributions irrevocable
Investment trust funds External portion of pools and investment accounts
Private-purpose trust funds All other trust activities
Custodial funds Subcategory “external investment pool” for pool assets not held
in a trust or equivalent arrangement
Business-type activities
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May report asset and liability (rather than fiduciary fund) for assets held for 3 months or less Additions and deductions = cash flows from operating activities
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III. Liability recognition Demand for the resources has been made, or
No further action or condition is required to be met to be entitled to receive the resources Example, tax collections on behalf of other governments
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IV. Level of detail – additions and deductions – trust funds
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Additions by source Separately report Investment income
Investment costs (that is, costs that are separable from both investment income and administrative expense)
Net investment income
Deductions by type Report administrative costs
Level of detail – additions and deductions – custodial funds
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If resources held for three months or less Option to report single aggregated totals for Additions
Deductions
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Asset retirement obligations
GASB Exposure Draft (12/15)
Proposed effective date: FYE 12/31/18
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Background Asset retirement obligation (ARO) Legally enforceable liability associated with the retirement of a
tangible capital asset Retirement = sale, abandonment, recycling, other types of disposal
Results from the normal operations of capital assets
Examples Costs associated with Decommissioning nuclear reactors
Dismantling and removing sewage treatment plants
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Recognition
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Three criteria Occurrence of external obligating event Source of (potential) obligation
Occurrence of internal obligating event Circumstances that trigger the obligation
Reasonably estimable
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External obligating events
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Existing laws and regulations
Legally binding contracts
Court judgments
Internal obligating events
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Occurrence of contamination from normal use
Events other than contamination Obligation based on use? Placing the asset into operation and consumption (mine)
Obligation not based on use? Placing the asset into operation (wind turbine)
Permanent abandonment before ready for use? Abandonment (sewage treatment plant)
Acquiring an asset that has an existing ARO Acquisition
Elements recognized
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Credit ARO liability
Debit Deferred outflow of resources Recognize as expense in a systematic and rational manner over useful life
Expense Abandonment before asset is ready for use
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Initial measurement
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Best estimate of current value (not present value) of outlays expected to occur Probability weighting of potential outcomes should be used if
sufficient evidence is available or can be obtained at reasonable cost Otherwise use most likely amount in range of possible outcomes
Remeasurement
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Annual adjustment for effects of inflation/deflation
Annual evaluation of effect of all other relevant factors Adjustment if effects on estimated asset retirement outlays are
significant Examples Change in price not attributable to inflation or deflation
Change in technology
Change in legal requirements
Change in type of equipment, facilities, or service
Treatment of changes in estimate
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Prior to retirement Prospective change in amortization
After retirement Immediate recognition
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Governmental funds
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Recognize liabilities for goods and services when received to the extent due and payable
Financial assurance requirements
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Disclose How those requirements are being met Amounts of assets restricted for payment (if not displayed
separately)
Other note disclosure
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Descriptive information about the nature and timing of AROs
Methods and assumptions used to estimate AROs
Estimated remaining useful life of associated assets
Any liability for an ARO has not been recognized only because it is not yet reasonably estimable (and the reason)
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Leases
GASB Exposure Draft (1/16)
Proposed effective date: FYE 12/31/19
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Scope
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Definition of a “lease” A contract that conveys the right to use a nonfinancial asset (the
underlying asset) for a period of time in an exchange or exchange-like transaction
Certain leases excluded from lease accounting (more later) Short-term leases Agreements that ultimately transfer ownership of the
underlying asset to the lessee
Lease term
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Period during which lessee has Noncancelable right to use underlying asset Adjusted for Option to extend (if exercise is reasonably certain)
Option to terminate (if exercise is reasonably certain)
Includes fiscal funding clauses
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Lessee accounting
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Initial recognition Lease asset Lease liability
Subsequent accounting Lease payments Reduction of liability
Interest expense
Amortization of lease asset Shorter of lease term or useful life of underlying asset
Lessee statement of position
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CurrentGuidance
Proposed Guidance
Underlying tangible capital
assetYes No
Right to use underlying
tangible capital asset
No Yes
Lease payable Yes Yes
Measurement
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Lease liability Present value (PV) of payments over lease term
Lease asset PV of payments over lease term + Payments made at or before the beginning of the term + Certain indirect costs
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Note disclosure
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Description of leasing arrangements
Amount of lease assets
Schedule of future lease payments
Lessor accounting
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Initial recognition Lease receivable Continue to report underlying asset
Deferred inflow of resources
Subsequent reporting Lease payments Reduction of receivable
Interest revenue
Reduction of deferred inflow of resources→revenue Over term of the lease
Systematic and rational manner
Lessor statement of position
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CurrentGuidance
Proposed Guidance
Lease receivable Yes Yes
Underlying capital asset
No Yes
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Measurement
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Lease receivable PV of lease payments over lease term
Deferred inflow of resources PV of lease payments over lease term + Payments received at or prior to the beginning of the lease that
relate to future periods
Note disclosure
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Description of leasing arrangements
Total amount of lease revenue
Short-term leases
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Definition A lease that, at its beginning, has a maximum possible term
under the contract of 12 months or less Includes options to extend
Accounting Lessee Expense based on the payment provisions of the contract
Lessor Revenue based on the payment provisions of the contract
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Agreements that transfer ownership
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Agreements that ultimately transfer ownership of the underlying asset to the lessee Treat as financed purchase if asset
Contracts with multiple components
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Separate lease component from nonlease component
Separate underlying assets normally treated as separate contracts Sometimes multiple lease components can be treated as a single
“lease unit”
Contract combinations
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Criteria for treating as a single contract Entered into at or near the same time With the same counterparty Certain additional criteria met
Then evaluate as a contract with multiple components
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Modifications
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Amendments to lease contracts Normally a modification If right to use reduced = partial termination
Treatment Lessee Remeasure lease liability
Adjust lease asset
Lessor Remeasure lease receivable
Adjust deferred inflow
Terminations
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Treatment Lessee Reduce lease liability
Reduce lease asset
Difference = gain/loss
Lessor Reduce lease receivable
Reduce deferred inflow
Difference = gain/loss
Subleases
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Separate transaction Lessee now lessor
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Sale-leaseback
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Must include qualifying sale Otherwise borrowing
Separate treatment Sale Lease-back Difference between carrying value of asset sold and net
proceeds = deferred inflow/outflow of resources Amortize over the term of the lease-back
GASB Exposure Drafts
Part II
Second Section
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Certain Debt Extinguishment Issues
GASB Exposure Draft (8/16)
Proposed effective date: FYE 6/30/18
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Topics
97
1. Debt extinguishment as the result of placing (exclusively) existing resources into trust
2. Accounting for prepaid insurance on refunded debt
3. Additional disclosure for debt defeased “in substance”
1. Focus of proposed guidance on debt extinguishments using existing resources
98
SOURCE OF PAYMENTPROCEEDS OF REFUNDING
DEBT
EXISTING RESOURCES
PAY
MEN
T
TO DEBT HOLDERS
CURRENTREFUNDING
TO TRUSTWITH LEGAL DEFEASANCE ADVANCE
REFUNDINGTO TRUST WITHIN-SUBSTANCEDEFEASANCE
FOCUS OF ED
Criteria for in-substance defeasance
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Same as for refundings Resources placed in trust Monetary assets (risk free as to amount, timing, and collection)
Available solely to make scheduled debt service payments
Possibility of future payments remote
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Proposed display
100
Economic resources (no deferral of recognition)
Reacquisition price
- Net carrying value of debt
(loss)/gain (reported separately)
Current financial resources Reacquisition price = debt service expenditures
Proposed disclosure
101
Period of defeasance General description of the transaction (examples) Amount of debt extinguished
Amount placed in trust
Reasons for defeasance
Cash flows required to service the defeased debt
Later periods Amount of in-substance defeased debt that remains outstanding May be combined with amount reported in connection with refundings
2. Prepaid insurance on extinguished debt
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Include in calculating net carrying amount of extinguished debt
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3. Note disclosure for debt defeased “in substance”
103
If nothing prohibits the substitution of essentially risk-free monetary assets with monetary assets that are not essentially risk free In the period Disclose that fact
In all periods the defeased debt remains outstanding Disclose the amount of outstanding defeased debt for which the risk of
substitution remains
Omnibus 201X
GASB Exposure Draft (9/16)
Proposed effective date: FYE 6/30/18
104
Blending CUs of BTAs
105
Existing guidance Two options for reporting blended component units (CUs) of
business-type activities (BTAs) Include in single column reported for the primary government, or
Present separate blended CU column within the primary government
Proposed clarification No effect on presentation of discretely presented CUs
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Goodwill outstanding at transition
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GASB 69 guidance for goodwill: Goodwill Difference between price paid and net position acquired
Positive amount ($ paid > net position acquired) Deferred outflow of resources
Negative amount ($ paid < net position acquired) Reduction in value of nonfinancial assets acquired
Amounts reported at transition Positive goodwill = reclassify as deferred outflow of resources
Negative goodwill = eliminate by an adjustment to net position
Fair value measurement and application
107
Limited scope Investment vs. capital asset for insurance entities Existing guidance = classify based on “predominant use”
Proposed guidance = classify based on GASB 72 definition of investment
General scope Clarify that amortized cost is an option rather than a
requirement for Money market investments
Interest-earning investment contracts
Timing for measuring postemployment benefits in governmental funds
108
Contrast Economic resources measurement focus As of the measurement date
Current financial resources measurement focus As of the end of the reporting period
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On-behalf benefit payments for postemployment benefits (governmental funds)
109
No change from GASB 24
Contributions made on employer’s behalf
+/- Adjustments to nonemployer payable
+ Benefits paid on employer’s behalf
Expenditures/revenues
Payroll-related measures for OPEB
110
Background Use = point of reference Two possible measures Covered payroll (“pensionable payroll”)
Covered-employee payroll (total payroll for covered employees, whether “pensionable” or not)
GASB 82 for pensions – used covered payroll
Complication for OPEB – benefits not always based on pay
Proposed measures for plans
111
OPEB PLANSCONTRIBUTION BASED ON
PAYCONTRIBUTION NOT
BASED ON PAY
COVERED PAYROLL NO MEASURE PROVIDED
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Proposed measures for employers
112
EMPLOYERS THAT OFFER OPEB
TRUST USED TRUST NOT USED
BENEFITS BASEDON PAY
COVEREDPAYROLL
COVERED-EMPLOYEEPAYROLL
BENEFITS NOTBASED ON PAY
COVERED-EMPLOYEEPAYROLL
COVERED-EMPLOYEEPAYROLL
Employer-paid member contributions for OPEB
113
Same guidance as for pensions Treat as employee contributions Like salaries, wages, and fringe benefits
Alternative measurement method for OPEB
114
Increase in the number of simplified assumptions permitted
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OPEB provided through private-sector plans
115
Same approach as for pension plans participating in private-sector plans Practice for defined contribution plans prior to GASB 68 Expense
Amounts paid
Amounts due and payable related to period
Question 7For purposes of determining whether an activity is fiduciary in character, which of the following criteria must be met to demonstrate control?
A. The government must hold the assets
B. The government must be able to direct the use of the assets
C. Both A and B
D. Either A or B
116
Question 8An ARO should be recognized, if measurable, if:
A. An external obligating event has occurred
B. An internal obligating event has occurred
C. Either A or B
D. Both A and B
117
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Question 9Under the proposed new lease accounting, which of the following would report two assets in connection with a lease?
A. Lessee
B. Lessor
C. Both A and B
D. Neither A nor B
118
Question 10How should a governmental fund report its payment of existing resources to a trust to accomplish an in-substance defeasance?
A. Expenditures
B. Other financing use
C. Either A or B, depending on the circumstances
119
Question 11Which measure of pay should be used as a point of reference in RSI for OPEB?
A. Covered payroll
B. Covered employee payroll
C. No measure
D. All of the above, depending on the circumstances
E. A or B, depending on the circumstances
120
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GASB Implementation Guidance Update—2016
Part III
121
Focus 83 New Questions
122
Deposits and investments [4.1] Disclosures not required for Deposits with the U.S. Treasury for unemployment
compensation Interfund loans Equity in joint ventures
Reason = not deposits or investments
123
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Deposits and investments [4.2] Scope of disclosure requirements Include: all items reported on the face of the financial
statements Amounts held by third parties on the government’s behalf (cash with fiscal
agent)
Amounts held as a fiduciary or custodian (state investment pool)
Exclude: items not reported on the face of the financial statements Securities held in escrow for refunded debt
124
Deposits and investments [4.3]
125
Fair value (FV) disclosure not required for cash equivalents Cash equivalents normally reported at amortized cost
Deposits and investments [4.4] Situation Component unit Separate report Position in internal investment pool
Resolution Disclosure for position in pool, not underlying assets
126
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Deposits and investments [4.5] Situation Certificates of deposit (CDs) Qualify as nonparticipating interest-earning investment
contracts
Resolution Provide disclosures for deposits
127
Deposits and investments [4.6] Situation Negotiable CDs Qualify as participating interest-earning investment contract
Resolution Measure at fair value Provide disclosures for Investment risk
Fair value
128
Deposits and investments [4.7] Situation Some investment instruments in portfolio highly sensitive to
changes in interest rates
Resolution Disclose effect on interest rate risk for overall portfolio Choose a method of interest rate risk disclosure that reflects special
sensitivity, or
Disclose the terms of those instruments
129
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Deposits and investments [4.8] Situation Investment in limited partnership Foreign currency
Resolution Foreign currency risk disclosure normally not applicable to
limited partnerships Exception: functionally equivalent to an investment in foreign
securities Partnership has significant investments which are all in Japan
130
Cash flows reporting [4.9] Classification of rental income Generated by an asset classified as an investment Cash flows from investing activities
Otherwise Cash flows from operating activities
Even if reported as nonoperating revenues on the operating statement
131
Financial reporting entity [4.10] Same rules on eliminations Primary government total column Government-wide total column
132
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Financial reporting entity [4.11]
133
Treatment of acquisition of a corporation Depends on reason for acquisition To directly enhance the ability to provide services to the public
Evaluate as potential component unit
Investment
Equity interest ownership = investment
Financial reporting entity [4.12] General partner in legally separate limited tax credit
partnership (component unit) Classification of net position Government (general partner)
Proportionate share of each of the three components of net position
Limited partners
Balance (restricted net position-nonexpendable-minority interest)
134
Financial reporting entity [4.13] Primary government serves as trustee for a defined benefit
pension plan Pension trust fund (if trust) Agency fund (if not a trust)
Not a potential component unit
135
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Pensions [4.14] Situation Plan assets may be returned to employer if funded status
reaches specified level Regardless of whether all plan obligations have been fulfilled
Resolution Not a trust Contributions not irrevocable
136
Pensions [4.15] Fair value reporting unaffected by Intent to hold debt securities to maturity Legal restriction that prevents sale below cost
137
Pensions [4.16] Date for plan disclosure of: 1) number of employees covered
by benefit terms, and 2) benefit terms Facts as of the end of the plan’s fiscal year Not facts as of the valuation date
138
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Pensions [4.17] Situation Single-employer or cost-sharing pension plan Update to plan reporting date
Resolution Disclose fact that update took place Not specific information about the update process
139
Pensions [4.18]
140
Situation Change in total pension liability resulting from a change in the
discount rate
Resolution Schedule of changes in the net pension liability
Present as change of assumption or other input
Pensions [4.19] Date of actuarial valuation used to determine the net pension
liability at the plan’s fiscal year-end Can vary in relationship to the plan’s fiscal year end from period
to period Still must fall within 24 months of the plan’s reporting date
141
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Pensions [4.20] Situation Cost-of-living adjustment (COLA) if investment earnings rate
exceeds actuarially assumed rate
Resolution Include in projection of benefit payments Adjusting the long-term expected rate of return used for discounting is
not an acceptable alternative
142
Pensions [4.21] Plan refunds of employee contributions Include as a benefit payment when: Projecting benefit payments to measure the total pension liability
Determining the discount rate
143
Pensions [4.22] Discount rate for pay-as-you-go funding Still required to exclude a portion of projected contributions
for purposes of calculating the discount rate (unless closed plan)
Total projected contributions
Less: Portion to finance benefits for future employees
Projected contributions for discount rate
144
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Pensions [4.23] Deferred outflow for employer contributions made after the
measurement date Component of the change in the net pension liability the
following year
145
Pensions [4.24] Amortizing pension-related deferred outflows/inflows Average expected remaining service lives of employees provided
with benefits For each active and inactive employee
Not a weighted average
146
Investments and investment pools [4.25] Investments that pension plans may report at cost or
amortized cost Nonparticipating interest-earning investment contracts Money market investments Participating interest-earning investment contracts with a
remaining maturity of one year or less at the time of purchase
147
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Investments and investment pools [4.26] Reporting retainage Fair value (if invested) If separate fund used Private-purpose trust fund
Agency fund (if amounts are held only for a short period)
148
Investments and investment pools [4.27] Scholarship money temporarily invested in commercial paper
prior to award Commercial paper = investment
149
Investments and investment pools [4.28] Changes in fair value for regulated industries Option 1(both statement of changes and statement of position) Report increases and decreases in the operating statement
Reverse them at the end of the statement
Net costs to be recovered from future billings
Report a regulatory amount on the statement of net position
Option 2 (just statement of position) Ignore the operating statement altogether and simply report a regulatory
amount on the statement of net position
150
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Investments and investment pools [4.29] Assets purchased for a dedicated purpose can still be
investments Examples Restricted assets
Assets in debt service or reserve funds
151
Investments and investment pools [4.30] Situation Bond covenant calls for cash-basis or amortized-cost basis for
some purposes Determine the amounts to be placed on deposit in reserve funds
Calculate coverage ratios
Resolution No effect on GAAP reporting Additional schedules and narrative explanations may be needed to
demonstrate compliance
152
Investments and investment pools [4.31]
153
Debt security that is not actively traded Still measure at fair value Various alternative methods for determining fair value for thinly traded
debt securities
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Investments and investment pools [4.32] Restrictions on the sale of an asset (effect on fair value) Specific to the asset itself Part of calculation of fair value
Example: sale of an asset in a private offering
Specific to the government holding the asset Not part of the calculation of fair value
Example: assets pledged as collateral
154
Investments and investment pools [4.33] Land acquired for conservation purposes and leased for
mineral rights Aggregation affects classification Single asset (land + mineral rights)
Capital asset
Separate assets
Land = capital asset
Mineral rights = investment
155
Investments and investment pools [4.34]
156
Transaction costs Relevant to determining most advantageous market Not relevant to determining fair value
Practical result The most advantageous market may not result in the highest fair
value (!)
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Transaction cost: most advantageous market
157
Transaction costs relevant for determining most advantageous market
Market A $26 sales price(3) transaction cost(2) cost to transport to market
$21 net amount received
Market B $25 sales price(1) transaction cost(2) cost to transport to market
$22 net amount received
Transaction costs: determination of fair value Transaction costs not relevant for determining fair value
Market A $26 sales price
(2) cost to transport to market$24 net amount received
Market B $25 sales price
(2) cost to transport to market$23 net amount received
158
Investments and investment pools [4.35] Must use principal market unless unable to do so
159
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Investments and investment pools [4.36]
160
Trust land Income dedicated to supporting public education Some parcels used for recreational purposes
Aggregation affects classification One unit of account Capital asset
Parcels reported separately Some capital assets
Some investments
Investments and investment pools [4.37] Examples of capital assets that can produce income Leased passenger terminals and hangars Water-treatment plants and distribution systems Leased easements on state land surrounding a waterway
161
Investments and investment pools [4.38] Buildings
Use affects classification Used exclusively to generate cash Investment
Rented to individuals to provide low-income housing Capital asset
162
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Investments and investment pools [4.39] Office building with several floors rented to retail merchants
Aggregation affects classification Building – single unit Capital asset
Building – separate unit for each floor Floors used by government = capital assets
Floors rented out = investment
163
Investments and investment pools [4.40]
164
Situation Building Acquired for use with a grant
Leased out until start of grant
Resolution Classify based on intent at time of acquisition Acquired for use = capital asset
Investments and investment pools [4.41] Situation Loans to a housing authority Fixed term Interest rate commensurate with market rates
Resolution Loans for programmatic purposes are not investments
165
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Investments and investment pools [4.42] “One-year option” Money market investments Positions in participating interest-earning investment contracts
Scope Not available to governmental external investment pools
Application of one-year criterion When acquired
166
Investments and investment pools [4.43] Fair value accounting for deep-discount debt No need to accrete interest (already reflected in fair value)
167
Investments and investment pools [4.44] Situation Pension plan invests in limited partnership Partnership calculates net asset value (NAV) NAV not calculated as of the plan’s reporting date
Resolution Adjust NAV by “rolling it forward” to the reporting date to take
into account subsequent changes Capital contributions
Distributions received from the general partner
Changes in the composition of assets or liabilities
Changes in the fair value of assets or liabilities
168
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Investments and investment pools [4.45] Option to use amortized cost Entities other than investment pools Money market investments or participating interest-earning
investment contracts
Based on the time as of acquisition Investment with a remaining maturity of three months would
not qualify if it was acquired 15 months earlier
169
Investments and investment pools [4.46] Fair value of an interest rate swap in a liability position Consider the effect of the government’s own credit quality and
any other factors that might affect the likelihood that the obligation will or will not be fulfilled
170
Investments and investment pools [4.47] A short sale is an obligation to deliver securities, rather than
an investment
171
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Investments and investment pools [4.48] Situation Life insurance contract that covers the lives of employees and
former employees Government is beneficiary
Resolution Report at cash surrender value Death benefits reported as income only upon the death of the
insured Not actuarially expected or projected basis
172
Investments and investment pools [4.49] Brokerage fees and legal fees arising in connection with the
purchase or sale of an investment Not part of the price of the investment Expense or expenditure when incurred
173
Investments and investment pools [4.50] Investment transactions should be accounted for as of the
trade date
174
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Investments and investment pools [4.51] Defined benefit pension plans may report an aggregate
amount for investment income Reporting of separate components not required
175
Investments and investment pools [4.52] GASB standards and governmental external investment pools All standards apply Most commonly applied GASB 3 (deposits, investments)
GASB 28 (securities lending)
GASB 34 (reporting model)
GASB 38 (certain note disclosures)
GASB 40 (deposit and investment risk disclosures)
GASB 53 (derivatives)
GASB 62 (FASB and AICPA guidance)
GASB 79 (money market pools)
176
Investments and investment pools [4.53] Determination whether capital asset or investment Normally when asset acquired Exception: implementation of GASB 72
Facts and circumstances at the time of implementation
177
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Financial reporting model [4.54] Sources for determining acquisition value Manufacturers’ catalogs Price quotes in periodicals Recent sales of comparable assets
Professional assistance not required
178
Financial reporting model [4.55] Infrastructure built and donated by developers Developer’s cost acceptable method for determining acquisition
value
179
Financial reporting model [4.56] Right-of-way easement on land underlying infrastructure
(not owner of land itself) Right-of-way asset equivalent to land Report separately from infrastructure
Report at acquisition value
Use of a nominal value not appropriate
Value of underlying land may be a good measure of acquisition value
180
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Financial reporting model [4.57] Land or easements associated with infrastructure Classify separately from related infrastructure itself Report at acquisition value
181
Financial reporting model [4.58] The purchase of land for nominal amount equivalent to
donation Report at acquisition value
182
Financial reporting model [4.59] Prior period adjustment for capital asset not initially
recorded Report at acquisition value when first acquired Not current acquisition value
183
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Financial reporting model [4.60] Situation Restricted unspent bond proceeds at year end Current liability for construction costs
Resolution Option 1: current asset Because it can be used to pay a current liability
Option 2: noncurrent asset Because it must be used for the acquisition or construction of a
noncurrent asset
184
Financial reporting model [4.61] Postemployment plans included in an employer report Report aggregated data for all plans by fund type Information for individual plans: Refer to separately issued plan financial statements; or
Include financial statements for each plan in notes
185
Financial reporting model [4.62] Investment trust funds and pension trust funds can be
reported together in the same financial statement Even though more detail is required for pension plans
Investment trust funds can either Display data at the same level as other fiduciary funds Clearly note on the face of the financial statements that
summarized amounts exclude the more detailed display provided for pensions
186
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Financial reporting model [4.63]
187
Situation Public employee retirement system (PERS) 2 defined benefit pension plans
1 cost-sharing pension plan
1 active employee healthcare plan
1 OPEB plan
Resolution No requirement for combined statements Detail on separate postemployment benefit plans Separate columns for each plan
Separate combining statements in basic financial statements
Financial reporting model [4.64] Possible contents of disclosure of capitalization policy Capitalization thresholds Methods used for determining historical cost or acquisition
value Extent of infrastructure capitalization
188
OPEB [4.65] Postemployment healthcare benefits always classified as
OPEB Reported separately by both plan and employers
189
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OPEB [4.66] Postemployment benefits (other than healthcare) provided
through a pension plan Treat as a pension benefit by both the employer and the plan
190
Derivatives [4.67] Derivative instrument that no longer qualifies as a hedging
derivative Automatically becomes investment derivative instrument All disclosures that apply to investments, derivatives, and fair
value
191
Derivatives [4.68] Investments underlying synthetic guaranteed investment
contracts (SGICs) Provide risk disclosures (GASB 40) Provide investment disclosures (GASB 72)
192
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IRC Section 457 Deferred Compensation Plans [4.69] Situation IRC Section 457 deferred compensation plan purchases annuity
contracts in the name of individuals
Resolution Equivalent to an allocated insurance contract Government reports neither an asset for the contracts themselves, nor the
related liabilities
Benefit payments = amounts paid to the insurance company
193
Nonexchange transactions [4.70] Donated food commodities Nonexchange transaction Recognize revenue
As soon as all eligibility requirements met
o Typically in the period received
Acquisition value of donated commodities
194
Nonexchange transactions [4.71] Donation of a capital-type asset to a governmental fund For use in operations (capital asset) No asset or revenue
For sale Asset and revenue in the fund that receives the proceeds
195
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Intangible assets [4.72] Intangible assets that qualify as investments Subject to same fair value rules as other types of investments
196
Governmental fund-type definitions [4.73] Situation Storm water fees that are restricted to storm water activities
(capital or operating) Anticipated ongoing subsidy = 25% Fees not designed to recover depreciation or debt service
Resolution Special revenue fund may be used Capital projects fund not required
Enterprise fund not required
197
Service concession arrangements [4.74] Situation Service concession arrangement (SCA) Agreed-upon rates that may be imposed on SCA customers
Resolution Meets criterion that government must retain the ability to
modify or approve prices
198
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Items previously reported as assets and liabilities [4.75] Insurance component of bond issuance cost Amortize as interest expense Not insurance expense
Rationale Insurance purchased to obtain lower interest rate
199
Nonexchange financial guarantees [4.76] Receivable recognized by blended component unit Amount of liability, but Continue to evaluate for collectability
200
Tax abatement disclosures [4.77] Situation Government uses tax increment financing (TIF) to encourage
economic development Issues bonds to finance infrastructure Sales tax revenues that exceed a baseline set aside for bond
repayment
Resolution TIFs not automatically tax abatements Earmarks rather than reduces taxes
No agreement that requires performance
201
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Tax abatement disclosures [4.78] Situation Business allowed to retain 40% of state sales tax collected from
customers Technically, sales tax is a tax on the customer, not the business The state is not reducing the business’s tax
The state is allowing the business to keep a portion of someone else’s tax payable to the state
Resolution Tax abatement because state foregoes revenue
202
Tax abatement disclosures [4.79] Situation Tax abatement requires that the agreement precede
performance by counterparty Tax abatement starts prior to performance
Resolution It is a tax abatement It is the agreement that must precede performance
The abatement itself can occur earlier
203
Tax abatement disclosures [4.80] Situation State abates gas tax for companies that go green Affects shared revenue of local governments
Resolution Tax abatement for state Reduces state tax revenue
Not a tax abatement for local governments Shared revenue is not a tax of the recipient
Reduction of shared revenue is not a reduction of tax
204
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Tax abatement disclosures [4.81] Situation 3 major programs = 20 agreements 5 remaining agreements
Resolution Disclosure for 5 remaining agreements depends on how major
programs were presented Information presented in the aggregate for each major program?
Information presented in aggregate for remaining 5
Quantitative threshold used to disclose individual agreements for major programs?
Same quantitative threshold applies to remaining 5
205
Tax abatement disclosures [4.82] Situation For government’s own programs Uses quantitative threshold for individual agreements
Resolution For agreements of other governments May use different quantitative threshold
May present information in the aggregate
206
Tax abatement disclosures [4.83] Situation State law prohibits disclosure of aggregated tax information that
relates directly or indirectly to a taxpayer’s income or earnings
Resolution Disclose whatever information is not prohibited by state law Describe the type of information omitted and cite state law that
prevents inclusion
207
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Question 12Investment disclosures would be required for which of the following?
A. Cash with fiscal agent
B. Amounts held as a fiduciary or custodian
C. Securities held in escrow for refunded debt
D. All of the above
E. Both A and B
208
Question 13How should rental income be classified in a statement of cash flows?
A. Cash flows for operating activities
B. Cash flows from investing activities
C. Either A or B, depending on the circumstances
209
Question 14Which of the following factors would affect whether an investment in debt securities should be measured at fair value?
A. Intent to hold to maturity
B. Legal restriction that prevents sale below cost
C. Both of the above
D. None of the above
210
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Question 15How should land acquired for conservation purposes and leased for mineral rights be classified?
A. Capital asset
B. Investment
C. Both A and B
D. Either A or C
211
Question 16A local government must provide tax abatement disclosures if a state abatement of tax revenues to a third party affects the amount of shared revenue the local government will receive.
A. True
B. False
212
Update on Reporting Model Review
Part IV
213
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Some conclusions to date
214
Financial reporting model is essentially sound
Existing structure of governmental funds provides an appropriate link to budgetary reporting
Governmental funds should have a short-term focus
Fiduciary activities should be reported only as fiduciary funds
Ongoing issues
215
1. Reporting for governmental funds
2. Budgetary comparison reporting
3. Classification of operating and nonoperating revenues and expenses
4. Classification and measurement focus for permanent funds
5. Some other issues
1. Reporting for governmental funds
216
Measurement focus Current guidance Current financial resources measurement focus
Issue Need for a more conceptually consistent approach
Near-term financial resources approach
Working-capital approach
Total financial resources approach
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Near-term financial resources approach
217
Symmetrical recognition - 60 days
Assets include Receivable at period-end and due to convert to cash within the
near term Cash and other financial resources that are available to be
converted to cash within the near term
Liabilities include Obligations normally payable at period-end and due within the
near term
Changes from current practice
218
Examples: Prepaids and inventories Do not report (no option to use consumption method)
Special assessment receivables Recognize asset only for portion due in near term
Accrued interest on long-term debt Liability for interest accrued at year end and due in near-term
Short-term operational borrowings (e.g., TANs) Inflow of resources (vs. fund liability)
Working-capital approach
219
Symmetrical recognition – 1 year
Assets include Receivable at period-end and due to convert to cash within the
next year Cash and other financial resources that are available to be
converted to cash within the next year Prepaids and inventories (consumed in next year)
Liabilities include Obligations normally payable at period-end and due within the
next year
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Changes from current practice
220
Examples: Prepaids and inventories Must report as assets if consumed within one year
Special assessment receivables Recognize asset only for portion due in one year
Accrued interest on long-term debt Liability for interest accrued at year end and due in one year
Long-term debt Liability for amount due in the following year
Would require statement of cash flows
Total financial resources approach
221
Symmetrical recognition Full accrual except for capital assets and capital-related debt
Assets include All accrual-based assets except capital assets
Liabilities include All accrual-based liabilities except capital-related debt
Changes from current practice
222
Examples: Include long-term debt that is not capital related Include net pension liability and net OPEB liability Classified presentation
Would require statement of cash flows
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2. Budgetary comparison reporting
223
Communication method Current guidance Either basic financial statement or RSI
Issue Should that option continue?
If not, what communication method should be used?
2. Budgetary comparison reporting
224
Presentation of budgetary variances Current guidance Encourage reporting of budgetary variances
Issue Should variance reporting be required?
If so which variances?
Final budget and actual
Original budget and final budget
Other variances
3. Classification of operating and nonoperating revenues and expenses
225
Current guidance Distinguish Disclose policy used to distinguish
Issue Should more guidance be provided on how to distinguish?
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4. Classification and measurement focus for permanent funds
226
Current guidance Report as governmental funds Use same measurement focus
Issue If either the near-term financial resources measurement focus
or the working capital measurement focus is selected, should there be a change? No longer report as governmental funds
Report as governmental funds, but use a different measurement focus
5. Other issues
227
MD&A Enhance analysis component Eliminate boilerplate Clarify guidance on known facts, decisions, or conditions that are
expected to have a significant effect on financial position or results of operations
Government-wide financial statements Format Statement of cash flows
Additional information about debt service funds
Project calendar
228
Invitation to comment (ITC) – 4Q16
Preliminary views (PV) – 3Q18
Exposure draft (ED) – 2Q20
Final statement – 4Q21
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Reporting deficiencies
Part V
229
Employer pension display
230
Do not net pension-related deferred outflows/inflows of resources except in the case of deferred amounts that result from differences between estimated and actual investment earnings
Do not net assets and liabilities of different plans
Report the entire amount of the net pension liability as a noncurrent liability Full amount reported as as “due in more than one year”
Employer pension disclosure
231
Disclose whether the pension plan is a single-employer, agent multiple-employer, or cost-sharing multiple-employer defined benefit plan
Disclose whether the pension plan issues a stand-alone financial report (and if so, how to obtain it)
Disclose the total amounts (if not otherwise identifiable) of Pension liabilities Pension assets Deferred outflows/inflows of resources Pension expense
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Employer pension disclosure
232
Disclose changes in the net pension liability for single-employer and agent multiple-employer plans Inclusion in RSI insufficient
Disclose actuarial assumptions and other inputs (e.g., dates of the experience studies, source of mortality assumptions)
The balances of pension-related deferred outflows and deferred inflows disclosed in the notes should be traceable to the statement of net position
Employer pension disclosure
233
The amounts of net pension liabilities and/or net pension assets disclosed in the notes should articulate to the statement of net position
The schedule of deferred outflows/inflows that will be recognized in pension expense for each of the subsequent five years and in the aggregate thereafter should exclude employer contributions subsequent to the measurement date of the net pension liability
Employer pension disclosure
234
Should not include GASB Statement 27 disclosures (e.g., three year trend data for annual pension cost and funded status and progress for the most recent actuarial valuation)
Should distinguish amounts for the primary government and amounts for discretely presented component units (e.g., sensitivity analysis and changes in the net pension liability)
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Employer pension RSI
235
Should include a schedule of employer contributions
Should report employer contributions as of the employer’s fiscal year end rather than as of the measurement date
Should include covered employee payroll as of the employer’s most recent fiscal year end rather than as of the measurement date
Employer pension RSI
236
Should include all the related ratios for Schedule of changes in net pension liability for single and agent
employers and Schedule of the employer’s proportionate share of the net
pension liability
Should refrain from providing GASB 27 trend information on funding progress
Cost-sharing employers should not include the RSI for the entire plan, in addition to the employer’s specific RSI
Management’s discussion and analysis (MD&A)
237
Should provide an analysis for all major funds to disclose the reasons for significant changes in fund balances
Should provide an analysis of significant variations in the general fund between Final budget amounts and actual budget amounts Original and final budget amounts
Should report deferred outflow/inflows of resources separately from assets and liabilities in the condensed financial statements
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Calculation of net investment in capital assets
238
Should exclude unspent debt proceeds
The liability related to the unspent portion of a debt issuance should be included in the same component of net position as the unspent proceeds
Should include deferred amounts from refundings in the calculation
Should include all the capital assets (e.g., land and construction in progress)
Should include capital related debt (e.g., retainage payable)
Statement of net position
239
Should differentiate between unearned revenues (liability) and deferred inflows
Should report deferred outflows/inflows separately from assets/liabilities
Reporting unavailable revenue
Governmental funds
240
Should report as major funds any fund that meets the criteria for the current fiscal year Remember to include deferred inflows and deferred outflows
when calculating major funds
Should report restricted, committed, or assigned fund balance by purpose, rather than by function
Should include a budgetary comparison for a major special revenue fund when the government legally adopts an annual or bi-annual budget for the fund
Should report long-term notes and loans receivable as restricted, committed, or assigned in funds other than the general fund
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Proprietary funds
241
Capital contributions are reported as nonoperating revenues on the statement of revenues, expenses, and changes in net position (despite being reported correctly as capital grants and contributions on the statement of activities)
Should report capital grants and contributions as capital contributions rather than as nonoperating revenue Normally reported correctly as capital grants and contributions in
the government-wide statement of activities
Disclosure – blended component units
242
Why a component unit is blended All relevant criteria need to be disclosed Share a governing body +
Financial benefit or burden?
Operational responsibility?
Application of wrong criteria Imposition of will
Fiscal dependency
Disclosure – discretely presented component units
243
Why a component unit is discretely presented All relevant criteria need to be disclosed Fiscal dependence +
Also require financial benefit or burden
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Other note disclosures
244
Should include the pledged revenue disclosures from paragraph 21 in GASB 48
Should disclose significant encumbrances by major funds and nonmajor funds in conjunction with required disclosures about other commitments
Should disclose the purpose of interfund balances
Should describe principal purposes of interfund transfers
RSI
245
Should disclose the budgetary basis in the notes to RSI when a general and major special revenue funds budgetary comparisons are reported as RSI
Budgetary reporting in Other Supplementary Information
246
If legally adopted annual budget, should include Nonmajor special revenue funds Debt service funds Capital projects funds that have legally adopted annual budgets
Should report at the legal level of budgetary control
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Statistical section
247
Amounts presented in the debt capacity schedules should be the same amounts reported in the basic financial statements Should include premiums and discounts in the statistical section
Should include narratives to describe atypical changes and anomalous data Example: effect of implementing GASB Statement 68 on the
net position
Should include all the debt for governmental activities in the direct and overlapping debt table
Statistical section
248
Calculate the ratio of debt service as a percentage of noncapital expenditures correctly Should use the capital outlay amount from the reconciliation of
the statement of revenues, expenditures and changes in fund balances to the statement of activities
Should include debt service expenditures in noncapital expenditures
Amounts should trace to the basic financial statements
Question 17The presentation of the net pension liability should distinguish amounts “due within one year” from amounts “due in more than one year.”
A. True
B. False
249
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Question 18The netting of pension-related deferred outflows and inflows of resources is:
A. Always required
B. Always prohibited
C. Normally prohibited, but sometimes permitted
250
Question 19Employers that participate in cost-sharing pension plans should provide RSI for:
A. Their proportionate share
B. The entire plan
C. Both
251
Question 20Restricted, committed, and assigned fund balance should be reported by:
A. Function
B. Purpose
C. Both
D. Either A or B
252
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GASB Technical Agenda
Part VI
253
Topics
254
Other GASB technical agenda projects
Setting priorities
Research activities
255
Equity interest ownership issues
Going concern disclosures reexamination
Note disclosure reexamination
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Potential projects
256
Emissions trading (carbon credits)
Exchange and exchange-like financial guarantees
Financial transactions with characteristics of both loans and grants
Impairments of assets other than capital assets
In-kind contributions
Interim financial reporting
Investment fees
Popular reporting
Potential projects (cont.)
257
Present value
Preservation method
Reporting unit presentations
Social impact bonds
Social security disclosures
Mark your calendar
258
2017 GFOA Annual Governmental GAAP Update Thursday, November 2, 2017 Thursday, December 7, 2017
