GASB Issues Two New Exposure Drafts | AccountingWEB

GASB Issues Two New Exposure Drafts

The Governmental Accounting Standards Board (GASB) has published two new exposure drafts (EDs) for comment. One relates to "Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries." The other is entitled "Budgetary Comparison Schedules -- Perspective Differences."

The first ED would require governments to report the effects of capital asset impairment in their financial statements when they occur. "Capital assets represent the largest category of assets on the statement of net assets of most governments," explains GASB Project Manager Roberta E. Reese. She adds, "The public has long expressed concern about the condition of those capital assets, especially roads and bridges, sewer and water systems, and schools."

Under GASB's proposal, capital assets would be reviewed periodically to see if they have been impaired due to such factors as physical damage, changes in legal or environmental factors, and technological changes or obsolescence. The ED would also require that all governments use uniform techniques to account for insurance recoveries. The effective date for the changes proposed in this ED would be for fiscal years beginning after December 15, 2004.

The second ED would apply to governments with budgetary structures that prevent them from being able to present budgetary comparison information for their general funds and major special revenue funds, as currently required by GASB Statement 34. The proposal would require that the budgetary comparison schedules be presented as supplementary information based on the fund, organization or program structure that the government uses for its legally adopted budget.

The changes proposed in this ED would be implemented simultaneously with GASB Statement 34. For governments that have already implemented Statement 34, the requirements would be effective for periods beginning after June 15, 2002.

The comment period for both EDs ends on February 28, 2003. Copies may be obtained by telephoning the GASB Order Department at 800-748-0659.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.