On Balance Magazine - May/June 2021

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{ Government Accounting | GASB update }

GASB Update for Wisconsin Communities

T

he Governmental Accounting Standards Board (GASB) has issued a number of new accounting standards that could have a significant impact on public sector organizations. As a result of the COVID-19 By Steven Henke, pandemic, GASB moved forward with allowing delays in CPA implementation of some new standards upon issuance of GASB Statement No. 95 – Postponement of the Effective Dates of Certain Authoritative Guidance, which became effective immediately. Other recently issued standards incorporated further-out effective dates. The effective dates noted in this article reflect the applicable revised implementation dates as set forth by GASB 95. In an effort to summarize several of the recent standards, this article will focus on those standards with a required implementation date for reporting periods beginning after Dec. 15, 2020 (i.e., Dec. 31, 2021, year-ends and later). The following GASB standards requiring upcoming implementation may impact your organization.

GASB Statement No. 87 – Leases GASB 87 changes the accounting and financial reporting requirements of organizations that enter into contractual relationships that meet the definition of a lease for assets such as real estate, vehicles and equipment.

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On Balance

May | June 2021

The January/February 2021 issue of On Balance offers a detailed analysis of GASB 87. GASB 87 is effective for fiscal years beginning after June 15, 2021.

GASB Statement No. 89 – Accounting for Interest Cost Incurred Before the End of Construction Period GASB 89 states that interest costs incurred before the end of a construction period should be recognized as an expense in the period incurred and should not be capitalized as part of the historical cost of the asset. GASB 89 is effective for reporting periods beginning after Dec. 15, 2020.

GASB Statement No. 91 – Conduit Debt Obligations GASB 91 provides a single method of reporting conduit debt obligations by issuers and eliminates diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations and (3) related note disclosures. The Statement achieves these objectives by (a) clarifying the existing definition of a conduit debt obligation, (b) establishing that a conduit debt obligation is not a liability of the issuer, (c) establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations, and (d) improving required noted disclosures. GASB 91 is effective for reporting periods beginning after Dec. 15, 2021.

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