Support Learning and Insight

It’s more important than ever to understand the challenges facing financial executives. Support the Financial Education & Research Foundation today.

Financial Reporting and Regulatory Update

First Quarter 2019

From the GASB

Proposals

Implementation guide on fiduciary activities

On Jan. 3, 2019, the GASB issued an exposure draft of a proposed implementation guide, “Fiduciary Activities.” The proposal contains questions and answers to clarify, explain, or elaborate on the GASB’s new standards on accounting and financial reporting for fiduciary activities, GASB Statement 84, “Fiduciary Activities.”

The GASB released Statement 84 in January 2017. The statement improves guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. It establishes criteria for identifying fiduciary activities of all state and local governments focused on 1) whether a government is controlling the assets of the fiduciary activity and 2) the beneficiaries with whom a fiduciary relationship exists.

The exposure draft proposes 53 new questions and answers to address accounting and financial reporting topics for fiduciary activities related to the following areas:

  • Identifying fiduciary activities (1-39)
  • Reporting fiduciary activities in fiduciary funds (40-46)
  • Statement of fiduciary net position (47)
  • Statement of changes in fiduciary net position (48-50)
  • Reporting fiduciary component units (51-53)

In addition, the exposure draft proposes amendments to five previously issued questions and answers from Implementation Guides 2015-1 and 2017-2.

Comments were due to the GASB on Feb. 28, 2019.

Implementation guide on leases

On Feb. 28, 2019, the GASB issued an exposure draft of a proposed implementation guide, “Leases.” The proposal contains questions and answers to clarify, explain, or elaborate on the GASB’s new standards on accounting and financial reporting for leases, GASB Statement 87, “Leases.”

The GASB released Statement 87 in June 2017. The statement includes guidance that establishes a single approach to accounting for and reporting leases by state and local governments based on the foundational principle that leases are financings of the right to use an underlying asset.

The exposure draft proposes 80 new questions and answers to address accounting and financial reporting topics for leases relative to the following areas:

  • Scope and applicability of Statement 87 (1-13)
  • Lease term (14-18)
  • Short-term leases (19-22)
  • Contracts that transfer ownership (23-24)
  • Lessee and lessor recognition and measurement for leases other than short-term leases and contracts that transfer ownership (25-39) and (46-56)
  • Notes to financial statements – lessees and lessors (40-45) and (57-58)
  • Lease incentives (59-60)
  • Contracts with multiple components (61-65)
  • Contract combinations (66-67)
  • Lease modifications and terminations (68-73)
  • Sale-leaseback transactions (74-75)
  • Lease-leaseback transactions (76-77)
  • Intra-entity leases (78)
  • Effective date and transition of Statement 87 (79-80)

Comments are due to the GASB by April 30, 2019.