The Governmental Accounting Standards Board (GASB) has issued an exposure draft on a proposed statement concerning the capitalization of interest cost and another exposure draft on a proposed implementation guide for several topics.
It also proposes simplifying the accounting for interest cost incurred during the period of construction. For financial statements prepared using the economic resources measurement focus, interest cost incurred during the construction period would be considered an expense in the period when the cost is incurred.
For financial statements prepared using the current financial resources measurement focus, interest incurred during the construction would still be recognized as an expenditure consistent with governmental fund accounting principles.
Comments are due by March 5.
The draft takes effect for reporting periods beginning after Dec. 15, 2018.
The second proposal, Implementation GuidanceUpdate—201Y,includes questions and answers intended to clarify or expand upon GASB statements. The proposed guidance includes several topics: pensions, other postemployment benefits, the statistical section, regulatory reporting, and tax abatement disclosures. The proposed implementation guide also includes amendments to previously issued guidance.
The guide’s requirements are effective for reporting periods beginning after June 15.
Comments are due by Feb. 16.
The GASB is an independent private-sector organization that sets accounting and financial reporting standards for U.S. state and local governments that follow generally accepted accounting principles. GASB standards are considered authoritative by state and local governments, state Boards of Accountancy and the American Institute of CPAs.
Terry Sheridan is an award-winning journalist who has covered real estate, mortgage finance, health care, insurance, personal finance, and accounting and taxation issues for newspapers, magazines, and websites. A Chicago native and former South Florida resident, she now lives in New England.