Summary of GASB Updates

1. Summary of GASB Updates • Effective Dates – Recently Issued GASB Standards • June 30, 2012 • GASB Statement No. 64, Derivative Instruments: Application of Hedge Accounting Termination Provisions

2. Summary of GASB Updates • Effective Dates – Recently Issued GASB Standards • June 30, 2013 • GASB Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements* • GASB Statement No. 61, The Financial Reporting Entity Omnibus, an amendment of GASB Statements No. 14 and No. 34 • GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance contained in Pre-November 30, 1989 FASB and AICPA* • GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position* * Effective as of the previous December 31, however effective as of June 30, for the State of Illinois.

3. Summary of GASB Updates • Effective Dates – Recently Issued GASB Standards • June 30, 2014 • GASB Statement No. 65, Items Previously Reported as Assets and Liabilities* • GASB Statement No. 66, Technical Corrections – 2012* • GASB Statement No. 67, Financial Reporting for Pension Plans * Effective as of the previous December 31, however effective as of June 30, for the State of Illinois.

4. Summary of GASB Updates • Effective Dates – Recently Issued GASB Standards • June 30, 2015 • GASB Statement No. 68, Accounting and Financial Reporting for Pension Plans

5. Summary of GASB Updates • GASB Statement No. 64 – Derivative Instruments: Application of Hedge Accounting Termination Provisions (Amendment to GASB No. 53) • Establishes criteria as to when hedge accounting should continue after the replacement of a swap counterparty or a swap counterparty’s credit support provider.

6. Summary of GASB Updates • GASB Statement No. 60 – Service Concession Arrangements (SCAs) • Public-Private Partnership in which: • The transferor conveys to an operator the right and obligation to provide services through the use of a facility (capital asset) in exchange for significant consideration. • The operator is compensated through fees from third parties. • The transferor has the ability to determine the services provided by the operator, to whom these services are available and the prices charged for the services. • The transferor is entitled to ownership or other significant residual interest in the service utility of the facility at the end of the arrangement. • Examples : • Parking Garages, Parking Meters, Roads and Bridges

7. Summary of GASB Updates • GASB Statement No. 61 – The Financial Reporting Omnibus • Provides amendments to GASB Statement No. 14, The Financial Reporting Entity relating to component and blended component units: • Increases emphasis on financial relationships (i.e. financial benefit or burden) between the primary government and the potential component unit when determining to include or exclude a potential component unit within the financial statements. • Expands the blending requirements for component units within the primary government financial statements. • Expands footnote disclosures emphasizing the reasons for including a component unit.

8. Summary of GASB Updates • GASB Statement No. 62 – Codification of Pre-November 30, 1989 FASB and AICPA Pronouncements • Primary objective is to directly incorporate the applicable provisions in FASB and AICPA pronouncements issued before November 30, 1989 into the state and local government accounting and financial reporting standards.

9. Summary of GASB Updates • GASB Statement No. 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources and Net Position • Addresses presentation issues associated with the new financial position elements created in Concepts Statement No. 4 (issued in June 2007). • Deferred Outflows of Resources and Deferred Inflows of Resources should only be used as specifically required in authoritative GASB pronouncements: • GASB No. 53 – Derivative Instruments • GASB No. 60 – Service Concession Arrangements • GASB No. 64 – Items Previously Presented as Assets and Liabilities

10. Summary of GASB Updates • Definitions: • Deferred outflow of resources • a consumption of net assets by the government that is applicable to a future period. • Has a natural “debit” balance and is reported similar to assets. • Deferred inflow of resources • An acquisition of net assets by the government that is applicable to a future reporting period. • Has a natural “credit” balance and is reported similar to liabilities. • Net position • The residual of all elements presented in a financial position statement.

11. Summary of GASB Updates Reporting Requirements Balance Sheet (Governmental Fund Financials) Assets Deferred Outflows of Resources Liabilities Deferred Inflows of Resources Fund Balance Statement of Net Position (Government-Wide Financials) • Assets • Deferred Outflows of Resources • Liabilities • Deferred Inflows of Resources • Net Position

12. Summary of GASB Updates • Reporting Requirements (cont.) • Footnote Disclosures – • Governments should provide details of different types of deferred amounts in the notes to the financial statements if the deferred inflow/outflow consists of multiple components on the face of the financial statements.

13. Summary of GASB Updates • GASB Statement No. 65 – Items Previously Reported as Assets and Liabilities • Objective is to determine whether certain transactions previously reported as assets and liabilities should continue to be reported as such or should instead be reported as: • A deferred outflow of resources, or • An outflow of resources (expense/expenditure), or • A deferred inflow of resources, or • An inflow of resources (revenue).

14. Summary of GASB Updates • GASB Statement No. 65 – Reporting Examples • Deferred Outflows of Resources (debit balance) • Grants paid in advance of meeting timing requirements • Deferred amounts from refunding of debt (debits) • Cost to acquire rights to future revenues (intra-entity) • Deferred loss from sale-leaseback • Deferred Inflows of Resources (credit balance) • Grants received in advance of meeting timing requirement (unavailable revenue within governmental funds) • Deferred amounts from refunding of debt (credits) • Proceeds from sales of future revenues (GASB No. 48) • Deferred gain from sale-leaseback • “Regulatory” credits

15. Summary of GASB Updates • GASB Statement No. 65 – Reporting Examples • Assets • Grants paid in advance of meeting eligibility requirements (other than timing) • Rights to future revenues acquired from outside the reporting entity • Liabilities • Derived tax revenue received in advance • Premium revenues (risk pools) • Grants received in advance of meeting eligibility requirements (other than timing)

16. Summary of GASB Updates • GASB Statement No. 65 – Reporting Examples • Outflows of Resources (Expense/Expenditure) • Debt issuance costs (other than insurance) • Initial costs incurred by lessor in an operating lease • Acquisition costs for risk pools • Loan origination costs • Inflows of Resources (Revenue) • Loan origination fees • Commitment fees (after exercise or expiration)

17. Summary of GASB Updates • GASB Statement No. 66 – Technical Corrections – an amendment of GASB Statements No. 10 and No. 62 • Resolves conflicting guidance surrounding differences in Statements No. 54 and No. 10 regarding the reporting of risk financing activities • Resolves differences between Statements No. 62 and No. 13 regarding the reporting of certain operating lease transactions and No. 48 regarding the reporting of the acquisition of a loan or group of loans

18. Summary of GASB Updates • GASB Statement No. 67 – Financial Reporting for Pension Plans & GASB Statement No. 68 – Accounting and Financial Reporting for Pension Plans • Guidance relates to the accounting and financial reporting surrounding how pension costs and obligations are measured and reported in audited external financial reports. • Issued in June 2012 – Final GASB Statement to be available in August 2012.