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New GASB Standard Addresses Wide Range of Practice Issues

Mar 21st 2017
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New guidance issued by the Governmental Accounting Standards Board (GASB) on March 20 addresses several accounting issues that popped up during the implementation and application of certain GASB standards for state and local governments.

Issues addressed in GASB Statement No. 85, Omnibus 2017, are related to blending component units, goodwill, fair value measurement and application, pensions, and other post-employment benefits (OPEB).

“The requirements of this statement will enhance consistency in the application of accounting and financial reporting requirements,” the GASB said. “Consistent reporting will improve the usefulness of information for users of state and local government financial statements.”

The new standard covers the following issues:

  • Blending a component unit in circumstances in which the primary government is a business-type activity that reports in a single column for financial statement presentation.
  • Reporting amounts previously reported as goodwill and “negative” goodwill.
  • Classifying real estate held by insurance entities.
  • Measuring certain money-market investments and participating interest-earning investment contracts at amortized cost.
  • Timing of the measurement of pension or OPEB liabilities and related expenditures recognized in financial statements prepared using the current financial resources measurement focus.
  • Recognizing on-behalf payments for pensions or OPEB in employer financial statements.
  • Simplifying certain aspects of the alternative measurement method for OPEB.
  • Presenting payroll-related measures in required supplementary information for purposes of reporting by other OPEB plans and employers that provide OPEB.
  • Classifying employer-paid member contributions for OPEB.
  • Accounting and financial reporting for OPEB provided through certain multiple-employer defined benefit OPEB plans.

Statement 85’s provisions take effect for reporting periods beginning after June 15, 2017. Earlier application is encouraged.

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