The GASB recently issued two Implementation Guides and approved their Technical Plan for the first third of 2014. Here are some things to be on the lookout for in 2014.
Comprehensive Implementation Guide
In September 2013, the GASB issued the Comprehensive Implementation Guide-2013-2014 (Implementation Guide) to assist in the implementation and application of various GASB pronouncements. It includes questions and answers from original implementation guides and adds, changes, and/or deletes questions and responses for the effects of any new standards issued since the previous Implementation Guide. The new edition has been updated for the effects of GASB Statement Nos. 65, 66, 67, and 70, which are effective as of June 30, 2013. For those governments that have not yet implemented the effects of GASB Statement Nos. 65, 66, and 67, the affected questions without the effects of those provisions are presented in a separate appendix. In addition, the effects of the provisions of GASB Statement Nos. 66 and 69, which are effective for periods beginning after June 15, 2014 and December 15, 2013, respectively, are presented in an additional appendix for governments that choose to implement early.
Note that the Implementation Guide does not include the effects of the provisions in GASB Statement No. 68, which is effective for periods beginning after June 15, 2014.
GASB Statement No. 68 Implementation Guide
In January 2014, the GASB issued the Guide to Implementation of GASB Statement 68 on Accounting and Financial Reporting for Pensions to broadly communicate guidance on the application of the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. The questions and answers provide a resource for common implementation situations entities may encounter as well as the basis for resolving similar situations you may encounter, which are not specifically addressed. Five new illustrations are also provided in addition to those originally included in the pronouncement. The 272 questions and answers are presented on various topics including:
• Scope and applicability of GASBS No. 68
• Defined benefit pension plans
• Special funding situations
• Cost-sharing employers
• Governmental non-employer contributing entities
• Effective date and transition
The focus of this project is (a) whether information should be reported, (b) when the information should be reported in state and local government financial statements, and (c) what measurement concepts and approaches should be used. An Exposure Draft (ED), Recognition of Elements of Financial Statements and Measurement Approaches, was issued in June 2013. The Board is evaluating feedback on the ED with plans to issue a final statement in March 2014.
Fair Value Measurement and Application
The objectives of this project include developing the definition of fair value as well as measurement methods, applicability, and disclosure. A Preliminary Views document, Fair Value Measurement and Application, was issued in June 2013. The Board is considering feedback with the intention of issuing an ED in May 2014.
For a more detailed discussion of the Preliminary Views document as well as the Conceptual Framework ED, refer to the Governmental Update, February 2014 newsletter article, GASB Activity Related to Measurement and Fair Value.
With this project, the Board is assessing the fiduciary responsibility criteria for when and how governments should report fiduciary activities in their financial reports and whether additional should be issued. The Board will be considering liability recognition, agency fund combining statements of changes in assets and liabilities, note disclosures, and implications to business-type activities and fiduciary fund types. An ED is expected in September 2014.
The purpose of this project is to evaluate lease accounting issues and whether operating leases meet the definition of assets or liabilities. The Board will consider whether current guidance, including disclosures, recognition, and measurement, of both lessees and lessors can be improved. Expect an ED in November 2014 with a final statement in late 2015.
Other Postemployment Benefit Accounting and Financial Reporting
Similar to pensions, this project is looking at the accounting and financial reporting for other postemployment benefits (OPEB) of state and local governments. The project strives to improve the transparency and usefulness of information related to OPEB for the users of both governmental financial reports as well as plan financial reports. Look for an ED for both the employer and plan in April 2014.
Tax Abatement Disclosures
This project is evaluating whether disclosure guidance should be developed for governments that grant tax abatements in the form of reduction or exemption from taxes, which are typically granted to specific taxpayers for the purpose of economic development. The Board will begin deliberations in 2014.
This project is considering the current GAAP hierarchy for state and local governments, which was established by GASB Statement No. 55. On December 20, 2013, the Board voted unanimously to issue an ED. As of the date of this article, the ED has not yet been issued.