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Accounting Updates for FY2013

Accounting Updates for FY2013. THECB. Overview. AFR Manual Updates Review prior changes Supplemental Schedules Optional MD&A: three years of comparative data Bad debt related to student receivables FY 2013 Changes GASB Statements#63 Concept Statement number 4

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Accounting Updates for FY2013

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  1. Accounting Updatesfor FY2013 THECB THECB 6/2013

  2. Overview • AFR Manual Updates • Review prior changes • Supplemental Schedules Optional • MD&A: three years of comparative data • Bad debt related to student receivables • FY 2013 Changes • GASB Statements#63 • Concept Statement number 4 • Exemption & Waiver Guidance • Future Standards Changes THECB 6/2013

  3. Statistical Schedules No longer required unless you present basic financial statements within a CAFR. Reference: GASB Statement 44, summary. Districts can voluntarily include them. The guidance will remain the same. Good to include for GFOA, credit analysts, etc. THECB 6/2013

  4. MD&A; Three Years of Data Three years’ worth of comparative data is required. The goal being to provide enough data in a comparative setting so that each of the two years presented can be compared to its prior year. Reference: Question 7.5.4, GASB implementation guide. THECB 6/2013

  5. Bad Debt for Student Receivables Guidance in manual was incorrect. Guidance is in GASB S34, footnote 41 and FARM 703.92. For receivables that affect revenue, record the provision for bad debt against revenues. For receivables that do not affect revenue (i.e. student loans), record the provision as an expense under institutional support. THECB 6/2013

  6. GASB Statements for FY 2013 Statement 63 – Concerns the financial reporting of deferred elements in the statements including deferred outflows of resources, deferred inflows of resources and net position. Concerns mainly derivative positions and service concession arrangements (SCAs). Statement 64 – an amendment of statement 53 which concerns the application of hedge accounting termination provisions for derivative instruments. THECB 6/2013

  7. GASB Statements for FY 2013(continued) • Concept Statement number 4 • All references to Net Assets changed to Net Position • GASB Statement # 62 • Remove all reference to FASB (Financial Accounting Standards Board) guidance issued prior to November 30, 1989. THECB 6/2013

  8. Guidance on Schedule A • Reporting tuition and fee revenue as well as related exemptions and waivers • exemptions as defined by the Texas Higher Education Coordinating Board (THECB) are to be reported as part of the gross tuition and fee revenues • waivers as defined by the THECB are to be excluded from gross tuition and fee revenues • College for All Texans www.collegeforalltexans.com Home/ Get All the Facts/ Paying for College /Types of Financial Aid THECB 6/2013

  9. GASB Statements FY 2014 • GASB statement 65 expanding the list of required elements considered deferred outflows and inflows • For example, debt issue costs (previously reported as assets) will now be expensed as an outflow of resources in the period in which they are incurred. • Insurance costs will continue to be recorded as an asset and expensed (interest) in future periods. THECB 6/2013

  10. GASB Statements FY 2014 • GASB statement 66 • (1) operating lease payments that vary from a straight-line basis, • (2) the difference between the initial investment (purchase price) and the principal amount of a purchased loan or group of loans, and • (3) servicing fees related to mortgage loans that are sold when the stated service fee rate differs significantly from a current (normal) servicing fee rate. THECB 6/2013

  11. GASB Statements FY 2014 • GASB statement 67 • Financial reporting by state and local governmental pension plans • Applicable only to the plan administrator • In Texas this will apply to the Teachers Retirement System (TRS), Employee Retirement System (ERS), and any local government plan that is a defined benefit plan. THECB 6/2013

  12. GASB Statements FY 2015 • GASB Statement 68 • Cost – Sharing Plans • Cost-sharing employers are those whose employees are provided with defined benefit pensions plans in which the pension obligations to the employees of more than one employer are pooled and plan assets can be used to pay the benefits of the employees of any employer that provides pensions through the pension plan • A College should recognize its proportionate share of the collective net pension liability, pension expense, and deferred inflows/outflows of a cost-sharing plan as of the employer’s measurement date • Proportion should be consistent with manner in which required contributions are determined THECB 6/2013

  13. GASB Statements FY 2015 • GASB statement 69 • combinations and disposals of college operations occurring in financial reporting periods beginning after December 15, 2013 THECB 6/2013

  14. References/Sources • The Governmental Accounting Research Systemgarsapp.gasb.org • KPMG Government Institute www.kpmginstitutes.com/government-institute/ CPE available for live webcasts THECB 6/2013

  15. KPMG Government Institute Webcasts on Demand Not-for-Profit GAAP Update GASB Activities Update Proposed Changes to Federal Grant Policies and Single Audits GASB Pension Accounting and Financial Reporting Standards Part I GASB Pension Accounting and Financial Reporting Standards - Part II Improving Cost Savings and Efficiency THECB 6/2013

  16. Other Items of Interest • Changes to submission requirements • Budget • Annual Financial Report • Statistical Schedules Modifications THECB 6/2013

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