The GASB Changes Debt Disclosure Requirements

On April 3, 2018, the Governmental Accounting Standards Board (GASB) issued Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements to improve the consistency and usefulness of financial statement disclosures related to debt.

Key Provisions

For purposes of determining required financial statement note disclosures, Statement No. 88 defines debt as “a liability that arises from a contractual obligation to pay cash (or other assets that may be used in lieu of cash) in one or more payments to settle an amount that is fixed at the date the contractual obligation is established.” The definition explicitly excludes accounts payable and leases other than those reported as a financed purchase of an underlying asset.

The statement adds a requirement for disclosures of summarized information about:

  • Amounts of unused lines of credits
  • Assets pledged as collateral
  • Debt agreement terms related to significant events of default, termination events, and subjective acceleration clauses

Debt disclosures should be separately presented for direct borrowings and direct placements of debt or other debt.  

Effective Dates and Transition

Statement No. 88 is effective for reporting periods beginning after June 15, 2018, and earlier application is encouraged.

The requirements should be applied retroactively by restating financial statements for all periods presented, if practicable.

We’re Here to Help

For more information about how Statement No. 88 may affect you and your organization, contact your Moss Adams professional.

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