GASB Clarifies Accounting and Financial Reporting Requirements

On February 5, 2020, the Governmental Accounting Standards Board (GASB) issued Statement No. 92, Omnibus 2020, to improve the consistency of authoritative literature and enhance the comparability in the application of accounting and financial reporting requirements.

The amended guidance applies to all state and local governments.

Key Provisions

Statement No. 92 amends the accounting and financial reporting requirements for specific issues related to:

  • Leases
  • Intra-entity transfers of assets
  • Postemployment benefits
  • Government acquisitions
  • Reinsurance recoveries

Details and effective dates are below.

Leases

The amended guidance clarifies the requirements for interim reporting by stating that the effective date of Statement No. 87, Leases, and Implementation Guide 2019-03, Leases, is for fiscal years beginning after December 15, 2019 and for all reporting periods thereafter.

This amendment became effective upon the issuance of Statement No. 92.

Intra-entity Transfers of Assets

The updated guidance is intended to eliminate conflicting guidance for intra-entity transfers of capital and financial assets between a government employer or nonemployee contributing entity and a pension plan or other postemployment benefit (OPEB) plan.

The amendments clarify that the difference between the amount paid and the carrying value of the assets transferred should be reported as an employer contribution or a nonemployer contributing entity contribution.
This amendment is effective for fiscal years beginning after June 15, 2020.

Postemployment Benefits

Statement No. 84, Fiduciary Activities, requires a government to recognize a liability to the beneficiaries of a fiduciary activity when an event has occurred that compels the government to disburse fiduciary resources.

The amendments clarify that this requirement also applies to assets that are accumulated for purposes of providing pensions or OPEB through defined benefit pension plans or defined benefit OPEB plans that aren’t administered through trusts that meet the scope criteria of Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans.

This amendment is effective for reporting periods beginning after June 15, 2020.

Government Acquisitions

The amended guidance states that the liabilities and assets related to the acquired entity’s asset retirement obligations (AROs) should be measured using the accounting and financial reporting requirements per Statement No. 83, Certain Asset Retirement Obligations, when the AROs are within the scope of Statement No. 83.

This amendment is effective for government acquisitions occurring in reporting periods beginning after June 15, 2020.

Risk Financing and Insurance-Related Activities of Public Entity Risk Pools

This amendment clarifies guidance in Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues. When applying the reinsurance guidance, amounts recoverable from reinsurers or excess insurers related to paid claims and claim adjustment expenses may be reported as reduction of expenses.

This amendment became effective upon issuance of Statement No. 92.

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For more information on how Statement No. 92 could affect your organization, contact your Moss Adams professional.