Authored by Heather Acker and Russ Hissom
In recent years, new governmental accounting standards that have been issued by the Governmental Accounting Standards Board (GASB) could have a significant impact on public sector organizations.
As of fourth quarter 2018 (Q4 2018), below are the current accounting standards that might impact your organization, projected effective dates and resources from Baker Tilly technical research and the GASB website to use while implementing new standards.
GASB standards to be implemented for financial statements for years ending on or after June 15, 2018:
GASB Statement No. 75 – Accounting and Reporting for Postemployment Benefits Other Than Pensions
GASB 75 details the employer reporting requirements for other post-employment employee benefits. GASB 75 is effective for fiscal years beginning after June 15, 2017.
- GASB Series: No. 75
- What you should know about GASB 75 webinar
- Deciphering regulatory accounting and rate stabilization under GASB 62
Implementation Guide No. 2018-1, Implementation Guidance Update – 2018
Guide 2018-1 contains questions and answers clarifying various topics in earlier implementation guides, including pensions, regulated operations, deposits and cash flows reporting. Guide 2018-1 is effective for fiscal years beginning after June 15, 2018.
GASB standards for future implementations and for which earlier application is encouraged:
GASB Statement No. 83 – Certain Asset Retirement Obligations
GASB 83 details the requirements for recording long-term asset retirement obligations – activities required by contract or government mandate to retire long-lived assets (such as a power plant). GASB 83 is effective for fiscal years after June 15, 2018.
GASB Statement No. 84 – Fiduciary Activities
GASB 84 clarifies the criteria for identifying fiduciary activities, with the focus on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Activities meeting certain criteria should be reported in a fiduciary fund in the financial statements. GASB 84 is effective for fiscal years after Dec. 15, 2018.
- GASB Series: No. 84
- Fiduciary activities changes affecting existing agency funds
- Reporting fiduciary activities webinar
- Understanding reporting requirements for fiduciary activities
- GASB No. 84 – Exposure Draft Implementation Guide – Issued Jan. 3, 2019, the exposure draft intends to clarify, explain or elaborate on GASB 84. GASB encourages comments by Feb. 28, 2019.
GASB Statement No. 87 – Leases
GASB 87 defines a lease as a contract that conveys control of the right to use another entity’s non-financial asset for a period of greater than one year. Purchased power agreements are exempt from this treatment (unlike the FASB lease standard). GASB 87 is effective for fiscal years after Dec. 15, 2019.
GASB Statement No. 88 – Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placement
GASB 88 requires certain disclosures for direct borrowings/placements, and additional disclosures for all debt, including unused lines of credit, assets pledged as collateral for debt and default terms or termination events included in debt covenants. GASB 88 is effective for fiscal years after June 15, 2018.
GASB Statement No. 89 – Accounting for Interest Cost Incurred before the End of Construction Period
GASB 89 requires that interest costs incurred before the end of a construction period will not be capitalized unless electing GASB 62 Regulated Operations accounting if these costs are included in utility rates. GASB 89 is effective for fiscal years after Dec. 15, 2019.
GASB Statement No. 90 – Majority Equity Interests (amendment of GASB Statements No. 14 and No. 61)
GASB 90 defines a majority equity interest and specifies a majority equity interest in a legally separate organization should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. A majority equity interest that meets the definition of an investment should be measured using the equity method, unless it is held by a special-purpose government engaged only in fiduciary activities, a fiduciary fund or an endowment (including permanent and term endowments) or permanent fund. GASB 90 is effective for fiscal years after Dec. 15, 2018.
Current GASB projects
GASB maintains a current projects board that includes status updates and projected issuance timelines for due process documents and final standards. Check out the GASB project guide for early 2019.
GASB has a full menu of areas under review and potential roll out in the future. Baker Tilly continues to provide updates as the GASB projects progress through the preliminary stage to exposure drafts with the opportunity for public comment. As standards are finalized, we provide technical summaries that cut through the clutter to the heart of what you need for a seamless implementation.
For more information on this topic, or to learn how Baker Tilly public sector specialists can help, contact our team.