Magazine article The CPA Journal

GASB to Issue New Governmental Reporting Model

Magazine article The CPA Journal

GASB to Issue New Governmental Reporting Model

Article excerpt

There was much joy in Norwalk, Conn., on June 10. By unanimous vote, the Governmental Accounting Standards Board (GASB) agreed to issue a standard that will create a new model for financial reporting for state and local governments. The standard was a long time in coming. Statement 11, issued in May 1990 to create a new basis of accounting for governmental funds, had been deferred indefinitely because of perceived problems in implementation. With the issuance of this new, comprehensive standard, Statement 11 will be rescinded.

The new model will require state and local governments to prepare a government-wide set of financial statements on the full accrual basis. The separate long-term liabilities group of accounts will disappear, as will the fixed asset account group.

The most problematic issue will be recording the assets of the government, including infrastructure, on a comprehensive, accrual-based balance sheet. Transition rules will recognize the practical difficulties of establishing the costs of those assets. Governments will only be required to go back to the 1980s or so, the point at which the National Council on Governmental Accounting first prescribed the need to establish inventories of infrastructure-type assets. …

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