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GASB STATEMENT 34 COMPLIANCE PEER EXCHANGE: What, Why & How April 25, 2001 Nashville, Tennessee

GASB STATEMENT 34 COMPLIANCE PEER EXCHANGE: What, Why & How April 25, 2001 Nashville, Tennessee. State Comptroller Perspective Mark A. Meadors, Comptroller Oklahoma Office of State Finance. Comptroller’s Role.

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GASB STATEMENT 34 COMPLIANCE PEER EXCHANGE: What, Why & How April 25, 2001 Nashville, Tennessee

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  1. GASB STATEMENT 34 COMPLIANCEPEER EXCHANGE: What, Why & HowApril 25, 2001Nashville, Tennessee • State Comptroller Perspective • Mark A. Meadors, Comptroller • Oklahoma Office of State Finance

  2. Comptroller’s Role • Full authority to establish financial reporting policy and guidelines with respect to the Comprehensive Annual Financial Report

  3. Comptroller’s Role • No direct relationship between CAFR and Legislative Budgeting process • No direct use of CAFR by decision makers • CAFR prepared to: • Comply with bond covenants • Meet statutory requirement • Provide audit assertion of fairness/completeness • Provide comparability to other states • Influence bond rating/interest costs

  4. Comptroller’s Role • CAFR not prepared to: • Replace Assessment/Condition Report • Support Legislative funding request

  5. Comptroller’s View • Historically supported GASB’s efforts to implement new reporting model • Encourage early implementation and simultaneous reporting of infrastructure • Encourage elimination of optional reporting

  6. Comptroller’s View • GASB 34 Presents ‘Results of Operations’ • Comprehensive look at ‘cost of gov’t services’ • full accrual accounting • entity wide perspective • depreciation of assets as a cost component

  7. Comptroller’s View • Infrastructure as reportable assets • Actual or Estimated Historical Cost • Measurement of the “Using up” of assets • Depreciation Method • Modified Approach

  8. Comptroller’s View • Significance of the Statement of Activities • Displays the Functions/Activities/Programs • Full Cost Presentation • Matched to Related Revenues • Net Benefit/Burden to general funding of gov’t

  9. Comptroller’s View • Significance of the Statement of Activities • Use of Depreciation Method: • Provides standardized, simple approach • Consistent, comparable information to compare trends both internally and externally

  10. Comptroller’s View • Significance of the Statement of Activities • Reflect use of Economic Resources in current period (versus Financial Resources) • Must include all costs • - direct, indirect, allocated • - amortization of capital assets (depreciation) • - accruals for incurred/unpaid costs

  11. Conclusion • GASB 34 is a significant change, and will also become a positive agent of change in how government finances are viewed.

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