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GASB Update

GASB Update. AGFOA April, 2012. Overview. Statement 61 – Reporting Entity Omnibus Statement 62 – Pre-89 FASB and AICPA Pronouncements Statement 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position

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GASB Update

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  1. GASB Update AGFOA April, 2012

  2. Overview • Statement 61 – Reporting Entity Omnibus • Statement 62 – Pre-89 FASB and AICPA Pronouncements • Statement 63 – Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position • Statement 64 – Derivative Instruments • Statement 65 – Elements of Financial Statements • Statement 66 – Technical Corrections

  3. Other • Preliminary Views Document - Economic Condition Reporting • OMB Advance Notice

  4. Effective For… • 2012 • Statement 64 • 2013 • Statement 61 • Statement 62 • Statement 63 • Statement 65 • Statement 66

  5. Statement 61 The Financial Reporting Entity: Omnibus

  6. Significant Changes • Increase the emphasis on financial relationships • Blending considerations • Clarify the recognition of ownership interests in • Joint ventures • Component units • Investments 6

  7. What Does This Really Mean? • Some CU’s won’t be • Some CU’s will be different • Financial vs. governance • Consider risk of being “misleading”

  8. Statement 62 Pre-1989 FASB and AICPA Pronouncements

  9. Reason for the Statement • Since FASB adopted its new codification, its original pronouncements are non-authoritative • Eliminates reference to application of pre-November 30, 1989, FASB pronouncements, unless they conflict with or contradict GASB pronouncements 9

  10. Statement 63 Deferred Outflows, Deferred Inflows, and Net Position

  11. Statement of Net Position • Deferred outflows of resources. • Deferred inflows of resources. • Classification – in process

  12. Net Position • Net investment in capital assets • Restricted • Unrestricted

  13. Disclosures • Details if not clear from face of statements. • Clarify significant impacts.

  14. Statement 64 • Derivative Instruments – Application of Hedge Accounting Termination Provisions – An Amendment of GASB Statement No. 53

  15. Hedges and Terminations • Terminate and replace • Questions around application of termination provisions in GASB 53 • Effective hedge remain?

  16. Statement 65 • Deferrals limited to instances specifically identified in authoritative pronouncements. • Guidance for reporting balances • Reclassifies certain items as deferred outflows of resources and deferred inflows of resources • Recognizes certain items reported as assets and liabilities as outflows of resources and inflows of resources.

  17. Specifics • Assets • Liabilities • True to the definitions in Concepts Statement 4

  18. What Changed? • Deferred gain/loss from refunding • Debt issuance costs • Initial direct costs of operating leases

  19. Major Fund Criteria • Combine assets and deferred outflows • Combine liabilities and deferred inflows

  20. Statement 66 • Removes requirement for reporting in General Fund or Internal Service Fund • Amends Statement No. 62, by modifying the specific guidance on accounting for • operating lease payments that vary from a straight-line basis, • the difference between the initial investment (purchase price) and the principal amount of a purchased loan or group of loans, and • servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current (normal) servicing fee rate.

  21. PV – Economic Condition Reporting • General idea • Right place to report?

  22. OMB Advance Notice • Change in threshold • Single Audit Lite • Streamlined audit requirements • Subrecipient monitoring • Compliance still required • Comment Period through 4/30

  23. Questions? Rob Moody 503.274.2849 rmoody@tkw.com

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