On February 27, 2015 the Governmental Accounting Standards Board (GASB) issued Statement No. 72 Fair Value Measurement and Application. The statement provides state and local governments with guidance on how to determine fair value measurement for financial reporting, guidance on applying fair value to specific investments and disclosures related to all fair value measurements.
The GASB issued this statement in order to improve comparability of governmental financial statements. It will require certain assets and liabilities to be measured using specific valuation techniques and will create more consistency in financial statement disclosures related to fair value measurement. Under the new statement, governmental financial statement users can expect to see a new hierarchy of fair value measurements, which will provide them with a better understanding of inputs used to value the governmental entity’s assets and liabilities.
This statement is required to be implemented for financial statement periods beginning after June 15, 2015. However, early application is encouraged. To learn more, contact your Elliott Davis Decosimo advisor.
You can view the full statement at GASB No. 72.