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Government Finance Officers Association

November 3, 2016 & December 1, 2016

2016 Annual Governmental GAAP

Update

Program Overview

2

Topics

3

I. Final GASB Statements

GASB 78 – Pensions Provided through Certain Multiple-Employer

Defined Benefit Pension Plans

GASB 79 – Certain External Investment Pools and Pool Participants

GASB 80 – Blending Requirements for Certain Component Units

GASB 81 – Irrevocable Split-Interest Agreements

GASB 82 – Pension Issues

Topics (cont.)

4

II. GASB Exposure Drafts

Fiduciary activities

Asset retirement obligations

Leases

Certain debt extinguishment issues

Omnibus

III. GASB Implementation Guidance Update—2016

IV. Update on Reporting Model Review

V. Reporting Deficiencies

VI. GASB Technical Agenda

Final GASB Statements

Part I

5

Pensions Provided through Certain

Multiple-Employer Defined Benefit

Pension Plans

GASB Statement No. 78

FYE 12/31/16 (early application encouraged)

6

Overview

Challenge

Employers in cost-sharing plans where neither the plan itself

nor most of its participating employers are governmental

entities

Difficult or impossible to obtain information to comply with GASB 68

Resolution

Remove from scope of GASB 68

Provide a different approach

7

Criteria to qualify

Plan not a state or local pension plan

Plan provides benefits to employees of nongovernmental

employers

No single government/governmental employers in the

aggregate predominant

8

Financial reporting

Use pre-GASB 68 guidance for cost-sharing plans

Pension expense/expenditure = employer contributions

associated with the period

Even if billed in a subsequent period

Employer liability limited to unpaid contributions

Required supplementary information (RSI)

Required contributions (ten most recent years)

9

Note disclosure

10

Name of the pension plan

Entity that administers the plan

Identification as a cost-sharing plan with requisite private-

sector characteristics

Whether the pension plan issues a publicly available financial

report and how to obtain it

Brief description of benefit terms, including:

Number of government employees covered

Types of benefits provided

Authority for establishing/amending benefits

Note disclosure (cont.)

11

Contribution requirements

Basis for determining employer contributions

Authority for establishing and amending

Required contribution rates

Dollar amount of required employer contributions

Expiration date of collective-bargaining agreement

Minimum contributions required for future periods by

collective-bargaining agreement(s), statutory obligations, or

other contractual obligations

Whether employer is subject to any provisions regarding

withdrawal from the pension plan

Note disclosures (cont.)

12

Information about employer payables

Balances if not otherwise identifiable

Significant terms

Description of what gave rise to the payables (e.g., related to

past service upon entrance into the arrangement)

Certain External Investment Pools

and Pool Participants


FYE 6/30/16 (earlier application encouraged)

Additional 6 months (certain credit risk requirements)

13

Background

14

Money-market mutual funds

Traditionally allowed to use amortized cost

Fair value normally approximates amortized cost

Traditional criteria = SEC 2a7

Challenge

Continued use of SEC Rule 2a7 no longer practical

Resolution

15

Set specific GASB criteria to replace SEC Rule 2a7

When a pool is allowed to report all of its investments at

amortized cost

When participants in a pool are allowed to report their

participation in the pool using a net asset value (NAV) based on

amortized cost

Six criteria (see following slides)

Significant noncompliance disqualifies for period

Return to amortized cost = change in accounting principle

Six criteria for a pool to qualify

1. Stable net asset value (NAV) per share

2. Portfolio maturity

Remaining maturity≤ 397 days

Weighted average maturity≤ 60 days

Takes into account maturity shortening features

Weighted average life ≤ 120 days

Ignores maturity shortening features

16

Criteria to qualify (cont.)

17

3. Portfolio quality

Highest category of short-term credit rating

4. Portfolio diversification

Single issuer≤ 5% total assets


18

5. Portfolio liquidity

Definitions

Illiquid = beyond 7 business days

Weekly liquid = within 5 business days

Daily liquid = within 1 business day

Requirements

When acquiring illiquid security

Liquid must remain ≥ 95% total assets

When acquiring any security

Daily liquid must remain ≥ 10% total assets

Weekly liquid must remain ≥ 30% total assets


19

6. Monthly calculation of a fair value shadow price

Deviation > 0.5% price/share = disqualification for use of

amortized cost

Disclosure requirements – pools and

participants

20

Any limitations or restrictions on participant withdrawals

Notice periods

Maximum transaction amounts

Pool’s authority to impose liquidity fees or redemption gates

Redemption gate: limitation on redemptions for a short period of time

Liquidity fees: A fee levied on investors that wish to redeem shares in times

of stress

Blending Requirements for Certain

Component Units



21

Background

Situation

Legally separate entities that are component units

Governing body comprises

Representatives of the community

Primary government as sole corporate member

Typically have not qualified for blending

Not the same board

Services not (almost) exclusively provided to government

Primary government not responsible for all debt

22

Challenge and solution

Theory

Blending should be used if a component unit functions

essentially as part of the government

Certainly the case if the government is the sole corporate member

Solution

Establish an additional criterion for blending

Unit incorporated as not-for-profit corporation (but not included based

on GASB 39), and

Primary government is sole corporate member

23

Irrevocable Split-Interest

Agreements



24

Background

25

Description of a “split-interest” arrangement

Donor transfers resources to an intermediary to administer for a

period of time (term) for the unconditional benefit of a

government and some other beneficiary

Intermediary

Government

Some other party

Term based on

Specific number of years (period-certain term)

Lifetime (life-contingent term)

Background (cont.)

26

Two types of “split interest”

Benefit over the term of the agreement

Lead interest

Benefit upon termination of the agreement

Remainder interest

Background (cont.)

27

Example – Alumnus donates retirement portfolio to

university in return for a lifetime annuity

Alumnus = lead interest

Annuity during lifetime

University = residual interest

Ownership of portfolio

Calculation

Total resources

Less Lead interest (at settlement amount)

Remainder interest

Four possibilities

28

GOVERNMENT

INTERMEDIARY

SOME OTHER

INTERMEDIARY

LEAD INTEREST

BENEFICIARYA C

REMAINDER

INTEREST

BENEFICIARY

B D

Government is intermediary (A&B)

29

Timing of recognition by government

Agreement executed and

Assets received

Elements recognized

Asset for donated resources

Liability to third party (= “split” interest)

Deferred inflow of resources (= government’s share)

Changes in value of assets – direct adjustment

Asset

Liability/deferred inflow

A. Lead interest beneficiary

30

Statement of position

Asset for donated resources

Liability to remainder interest beneficiary

Deferred inflow for government’s lead interest

Statement of resource flows

Revenue for beneficial interest applicable to period

B. Remainder interest beneficiary (life-

interest in real estate)

31


Donated asset (investment or capital asset)

If capital asset, reduce value for consumption during term by an

adjustment to deferred inflow of resources

Liability for legal obligation to sacrifice resources (future

insurance, maintenance, or repairs)

The continued right to use the asset is not a liability

Deferred inflow of resources for the difference


Revenue for beneficial interest at termination

B. Remainder interest beneficiary

(other than life-interest in real estate)

32


Liability to lead interest beneficiary

Deferred inflow for government’s remainder interest



If actual residual amount exceeds deferred inflow

Gain (accrual)

Revenue (modified accrual)

Some other intermediary (C&D)

33

Timing of recognition by government

Sufficient information to measure the government’s beneficial

interest

The government is specified by name as beneficiary

The agreement is irrevocable

The donor has not granted variance power to the intermediary

The donor does not control the intermediary

The agreement establishes a legally enforceable right for the government

Elements recognized

Asset (fair value)

Deferred inflow of resources

C. Lead interest beneficiary

34


Asset



Revenue for beneficial interest applicable to the period

D. Remainder interest beneficiary


Asset




35

Pension Issues


FYE 6/30/17* (earlier application encouraged)

*Later for one provision in some limited circumstances

36

Three issues

37

Measure of payroll

Selection of assumptions

Classification of employer-paid member contributions

Measure of payroll

38

Replace covered-employee payroll with covered payroll

Covered-employee payroll (total compensation of covered

employees)

Even if a portion is not relevant to employer contributions

Covered payroll (portion of payroll on which contributions are

based)

“Pensionable payroll”

Selection of assumptions

Actuarial assumptions cannot deviate from Actuarial

Standards of Practice (ASOPs)

39

Classification of employer-paid

member contributions

40

Classified like similar forms of compensation other than

pensions (fringe benefits)

Question 1

Which of the following amounts should be included as part of

the calculation of pension expenditures for employers associated

with private-sector cost-sharing plans?

A. Related to the period and paid then

B. Related to the period and billed, but not yet paid

C. Related to the period, but not yet billed

D. All of the above

E. Both A and B

41

Question 2

A pool that significantly fails to comply with the criteria of

GASB 79 in a given period is not permitted to use amortized

cost in future periods.

A. True

B. False

42

Question 3

If a pool’s portfolio has $10,000 in assets (all liquid), what

would be the maximum amount of illiquid assets it could

acquire without disqualifying itself from using amortized cost

accounting for all of its portfolio?

A. $0

B. $500 (95% of $10,000)

C. $526*

*$10,000/.95 = $10,526; $10,526 - $10,000 = $526

43

Question 4

Which of the following statements is true if a primary

government is the sole corporate member of the board of not-

for-profit component?

A. Blending is mandatory

B. Blending is optional

C. Blending is prohibited

44

Question 5

Which of the following is true in connection with the

government’s interest in life-interest real estate?

A. The asset should not be reduced for consumption until the

end of the term

B. A liability should be recognized for the right to use the

asset

C. Both A and B

D. Neither A nor B

45

Question 6

Under GASB 82, which measure of pay should be used as a

point of reference for required supplementary information

regarding pensions?

A. Covered payroll

B. Covered-member payroll

C. Either A or B

46

GASB Exposure Drafts

Part II

First Section

47

Fiduciary activities

GASB Exposure Draft (12/15)

Proposed effective date: FYE 12/31/18

48

Background

Issues

I. Proper use of fiduciary funds

II. Fiduciary fund types

III. Liability recognition

IV. Level of detail – additions and deductions

49

I. Proper use of fiduciary funds

50

Component units that are fiduciary in nature

Control + postemployment benefit plan assets

Most defined contribution plans would not meet this criterion

Control + two additional criteria

Control

51

Two possibilities

The primary government holds the assets or

The government has the ability to direct the use, exchange, or

employment of the assets

Clarifications

Direct = designate a third party to perform a government’s

fiduciary duties without assuming them

Unaffected by restrictions on use

Two additional criteria

52

1. The assets are not derived solely from the government’s

own-source revenue and

2. One or more of the following

A. Nature of arrangement

B. Identity of beneficiaries

C. Pass-through grants

2A. Nature of arrangement

53

Administered through trust or equivalent agreement

Government itself not a beneficiary

Assets dedicated to providing benefits to recipients

Assets legally protected from the creditors of the

government

2B. Identity of beneficiaries

54

Individuals not required to be

Residents

Recipients of the government’s services

Organizations or other governments not

Part of the financial reporting entity

Recipients of the government’s goods or services

2C. Pass-through grants

55

Provided the government does not have administrative or

direct financial involvement in the program

Summary

56

Component units that are fiduciary in nature

Control + postemployment benefit plan assets

Control + not own-source revenue + either

Nature of arrangement, or

Identify of beneficiaries, or

Pass-through grant

SUMMARY CHART

57

CU

FIDUCIARY

IN NATURE

CONTROL

PENSION

OR OPEB

PLAN ASSETS

NOT OWN-SOURCE REVENUE

NATURE OF

ARRANGEMENT

IDENTITY OF

BENEFICIARIES

PASS-

THROUGH

GRANTS

II. Fiduciary fund types

58

Replace agency funds with custodial funds

Trust funds vs. custodial funds

Trust funds

Nature of arrangement criterion met

Custodial funds (replace agency funds)

Nature of arrangement criterion not met

Fiduciary fund types (cont.)

59

Trust funds

Pension (and other employee benefit) trust funds

Employee benefit plans

Contributions irrevocable

Investment trust funds

External portion of pools and investment accounts

Private-purpose trust funds

All other trust activities

Custodial funds

Subcategory “external investment pool” for pool assets not held

in a trust or equivalent arrangement

Business-type activities

60

May report asset and liability (rather than fiduciary fund) for

assets held for 3 months or less

Additions and deductions = cash flows from operating activities

III. Liability recognition

Demand for the resources has been made, or

No further action or condition is required to be met to be

entitled to receive the resources

Example, tax collections on behalf of other governments

61

IV. Level of detail – additions and

deductions – trust funds

62

Additions by source

Separately report

Investment income

Investment costs (that is, costs that are separable from both investment

income and administrative expense)

Net investment income

Deductions by type

Report administrative costs

Level of detail – additions and

deductions – custodial funds

63

If resources held for three months or less

Option to report single aggregated totals for

Additions

Deductions

Asset retirement obligations



64

Background

Asset retirement obligation (ARO)

Legally enforceable liability associated with the retirement of a

tangible capital asset

Retirement = sale, abandonment, recycling, other types of disposal

Results from the normal operations of capital assets

Examples

Costs associated with

Decommissioning nuclear reactors

Dismantling and removing sewage treatment plants

65

Recognition

66

Three criteria

Occurrence of external obligating event

Source of (potential) obligation

Occurrence of internal obligating event

Circumstances that trigger the obligation

Reasonably estimable

External obligating events

67

Existing laws and regulations

Legally binding contracts

Court judgments

Internal obligating events

68

Occurrence of contamination from normal use

Events other than contamination

Obligation based on use?

Placing the asset into operation and consumption (mine)

Obligation not based on use?

Placing the asset into operation (wind turbine)

Permanent abandonment before ready for use?

Abandonment (sewage treatment plant)

Acquiring an asset that has an existing ARO

Acquisition

Elements recognized

69

Credit

ARO liability

Debit

Deferred outflow of resources

Recognize as expense in a systematic and rational manner over useful life

Expense

Abandonment before asset is ready for use

Initial measurement

70

Best estimate of current value (not present value) of outlays

expected to occur

Probability weighting of potential outcomes should be used if

sufficient evidence is available or can be obtained at reasonable

cost

Otherwise use most likely amount in range of possible outcomes

Remeasurement

71

Annual adjustment for effects of inflation/deflation

Annual evaluation of effect of all other relevant factors

Adjustment if effects on estimated asset retirement outlays are

significant

Examples

Change in price not attributable to inflation or deflation

Change in technology

Change in legal requirements

Change in type of equipment, facilities, or service

Treatment of changes in estimate

72

Prior to retirement

Prospective change in amortization

After retirement

Immediate recognition

Governmental funds

73

Recognize liabilities for goods and services when received to

the extent due and payable

Financial assurance requirements

74

Disclose

How those requirements are being met

Amounts of assets restricted for payment (if not displayed

separately)

Other note disclosure

75

Descriptive information about the nature and timing of AROs

Methods and assumptions used to estimate AROs

Estimated remaining useful life of associated assets

Any liability for an ARO has not been recognized only because

it is not yet reasonably estimable (and the reason)

Leases



76

Scope

77

Definition of a “lease”

A contract that conveys the right to use a nonfinancial asset (the

underlying asset) for a period of time in an exchange or exchange-like

transaction

Certain leases excluded from lease accounting (more later)

Short-term leases

Agreements that ultimately transfer ownership of the

underlying asset to the lessee

Lease term

78

Period during which lessee has

Noncancelable right to use underlying asset

Adjusted for

Option to extend (if exercise is reasonably certain)

Option to terminate (if exercise is reasonably certain)

Includes fiscal funding clauses

Lessee accounting

79

Initial recognition

Lease asset

Lease liability

Subsequent accounting

Lease payments

Reduction of liability

Interest expense

Amortization of lease asset

Shorter of lease term or useful life of underlying asset

Lessee statement of position

80

Current

Guidance

Proposed

Guidance

Underlying

tangible capital

asset

Yes No

Right to use

underlying

tangible capital

asset

No Yes

Lease payable Yes Yes

Measurement

81

Lease liability

Present value (PV) of payments over lease term

Lease asset

PV of payments over lease term +

Payments made at or before the beginning of the term +

Certain indirect costs

Note disclosure

82

Description of leasing arrangements

Amount of lease assets

Schedule of future lease payments

Lessor accounting

83

Initial recognition

Lease receivable

Continue to report underlying asset


Subsequent reporting

Lease payments

Reduction of receivable

Interest revenue

Reduction of deferred inflow of resources→revenue

Over term of the lease

Systematic and rational manner

Lessor statement of position

84

Current

Guidance

Proposed

Guidance

Lease receivable Yes Yes

Underlying

capital assetNo Yes

Measurement

85

Lease receivable

PV of lease payments over lease term


PV of lease payments over lease term +

Payments received at or prior to the beginning of the lease that

relate to future periods

Note disclosure

86

Description of leasing arrangements

Total amount of lease revenue

Short-term leases

87

Definition

A lease that, at its beginning, has a maximum possible term

under the contract of 12 months or less

Includes options to extend

Accounting

Lessee

Expense based on the payment provisions of the contract

Lessor

Revenue based on the payment provisions of the contract

Agreements that transfer ownership

88

Agreements that ultimately transfer ownership of the

underlying asset to the lessee

Treat as financed purchase if asset

Contracts with multiple components

89

Separate lease component from nonlease component

Separate underlying assets normally treated as separate

contracts

Sometimes multiple lease components can be treated as a single

“lease unit”

Contract combinations

90

Criteria for treating as a single contract

Entered into at or near the same time

With the same counterparty

Certain additional criteria met

Then evaluate as a contract with multiple components

Modifications

91

Amendments to lease contracts

Normally a modification

If right to use reduced = partial termination

Treatment

Lessee

Remeasure lease liability

Adjust lease asset

Lessor

Remeasure lease receivable

Adjust deferred inflow

Terminations

92

Treatment

Lessee

Reduce lease liability

Reduce lease asset

Difference = gain/loss

Lessor

Reduce lease receivable

Reduce deferred inflow

Difference = gain/loss

Subleases

93

Separate transaction

Lessee now lessor

Sale-leaseback

94

Must include qualifying sale

Otherwise borrowing

Separate treatment

Sale

Lease-back

Difference between carrying value of asset sold and net

proceeds = deferred inflow/outflow of resources

Amortize over the term of the lease-back

GASB Exposure Drafts

Part II

Second Section

95

Certain Debt Extinguishment

Issues



96

Topics

97

1. Debt extinguishment as the result of placing (exclusively)

existing resources into trust

2. Accounting for prepaid insurance on refunded debt

3. Additional disclosure for debt defeased “in substance”

1. Focus of proposed guidance on debt

extinguishments using existing resources

98

SOURCE OF PAYMENT

PROCEEDS OF

REFUNDING

DEBT

EXISTING

RESOURCES

PAY

ME

NT

TO DEBT

HOLDERS

CURRENT

REFUNDING

TO TRUSTWITH

LEGAL

DEFEASANCE ADVANCE

REFUNDINGTO TRUST WITH

IN-SUBSTANCE

DEFEASANCE

FOCUS OF ED

Criteria for in-substance defeasance

99

Same as for refundings

Resources placed in trust

Monetary assets (risk free as to amount, timing, and collection)

Available solely to make scheduled debt service payments

Possibility of future payments remote

Proposed display

100

Economic resources (no deferral of recognition)

Reacquisition price

- Net carrying value of debt

(loss)/gain (reported separately)

Current financial resources

Reacquisition price = debt service expenditures

Proposed disclosure

101

Period of defeasance

General description of the transaction (examples)

Amount of debt extinguished

Amount placed in trust

Reasons for defeasance

Cash flows required to service the defeased debt

Later periods

Amount of in-substance defeased debt that remains outstanding

May be combined with amount reported in connection with refundings

2. Prepaid insurance on extinguished

debt

102

Include in calculating net carrying amount of extinguished

debt

3. Note disclosure for debt defeased

“in substance”

103

If nothing prohibits the substitution of essentially risk-free

monetary assets with monetary assets that are not essentially

risk free

In the period

Disclose that fact

In all periods the defeased debt remains outstanding

Disclose the amount of outstanding defeased debt for which the risk of

substitution remains

Omnibus 201X



104

Blending CUs of BTAs

105

Existing guidance

Two options for reporting blended component units (CUs) of

business-type activities (BTAs)

Include in single column reported for the primary government, or

Present separate blended CU column within the primary government

Proposed clarification

No effect on presentation of discretely presented CUs

Goodwill outstanding at transition

106

GASB 69 guidance for goodwill:

Goodwill

Difference between price paid and net position acquired

Positive amount ($ paid > net position acquired)

Deferred outflow of resources

Negative amount ($ paid < net position acquired)

Reduction in value of nonfinancial assets acquired

Amounts reported at transition

Positive goodwill = reclassify as deferred outflow of resources

Negative goodwill = eliminate by an adjustment to net position

Fair value measurement and

application

107

Limited scope

Investment vs. capital asset for insurance entities

Existing guidance = classify based on “predominant use”

Proposed guidance = classify based on GASB 72 definition of investment

General scope

Clarify that amortized cost is an option rather than a

requirement for

Money market investments

Interest-earning investment contracts

Timing for measuring postemployment

benefits in governmental funds

108

Contrast

Economic resources measurement focus

As of the measurement date

Current financial resources measurement focus

As of the end of the reporting period

On-behalf benefit payments for

postemployment benefits (governmental

funds)

109

No change from GASB 24

Contributions made on employer’s behalf

+/- Adjustments to nonemployer payable

+ Benefits paid on employer’s behalf

Expenditures/revenues

Payroll-related measures for OPEB

110

Background

Use = point of reference

Two possible measures

Covered payroll (“pensionable payroll”)

Covered-employee payroll (total payroll for covered employees, whether

“pensionable” or not)

GASB 82 for pensions – used covered payroll

Complication for OPEB – benefits not always based on pay

Proposed measures for plans

111

OPEB PLANS

CONTRIBUTION BASED ON

PAY

CONTRIBUTION NOT

BASED ON PAY

COVERED PAYROLL NO MEASURE PROVIDED

Proposed measures for employers

112

EMPLOYERS THAT OFFER OPEB

TRUST USED TRUST NOT USED

BENEFITS BASED

ON PAY

COVERED

PAYROLL

COVERED-

EMPLOYEE

PAYROLL

BENEFITS NOT

BASED ON PAY

COVERED-

EMPLOYEE

PAYROLL

COVERED-

EMPLOYEE

PAYROLL

Employer-paid member contributions

for OPEB

113

Same guidance as for pensions

Treat as employee contributions

Like salaries, wages, and fringe benefits

Alternative measurement method for

OPEB

114

Increase in the number of simplified assumptions permitted

OPEB provided through private-sector

plans

115

Same approach as for pension plans participating in private-

sector plans

Practice for defined contribution plans prior to GASB 68

Expense

Amounts paid

Amounts due and payable related to period

Question 7

For purposes of determining whether an activity is fiduciary in

character, which of the following criteria must be met to

demonstrate control?

A. The government must hold the assets

B. The government must be able to direct the use of the assets

C. Both A and B

D. Either A or B

116

Question 8

An ARO should be recognized, if measurable, if:

A. An external obligating event has occurred

B. An internal obligating event has occurred

C. Either A or B

D. Both A and B

117

Question 9

Under the proposed new lease accounting, which of the

following would report two assets in connection with a lease?

A. Lessee

B. Lessor

C. Both A and B

D. Neither A nor B

118

Question 10

How should a governmental fund report its payment of existing

resources to a trust to accomplish an in-substance defeasance?

A. Expenditures

B. Other financing use

C. Either A or B, depending on the circumstances

119

Question 11

Which measure of pay should be used as a point of reference in

RSI for OPEB?

A. Covered payroll

B. Covered employee payroll

C. No measure

D. All of the above, depending on the circumstances

E. A or B, depending on the circumstances

120

GASB Implementation Guidance

Update—2016

Part III

121

Focus

83 New Questions

122

Deposits and investments [4.1]

Disclosures not required for

Deposits with the U.S. Treasury for unemployment

compensation

Interfund loans

Equity in joint ventures

Reason = not deposits or investments

123


Scope of disclosure requirements

Include: all items reported on the face of the financial

statements

Amounts held by third parties on the government’s behalf (cash with fiscal

agent)

Amounts held as a fiduciary or custodian (state investment pool)

Exclude: items not reported on the face of the financial

statements

Securities held in escrow for refunded debt

124


125

Fair value (FV) disclosure not required for cash equivalents

Cash equivalents normally reported at amortized cost


Situation

Component unit

Separate report

Position in internal investment pool

Resolution

Disclosure for position in pool, not underlying assets

126


Situation

Certificates of deposit (CDs)

Qualify as nonparticipating interest-earning investment

contracts

Resolution

Provide disclosures for deposits

127


Situation

Negotiable CDs

Qualify as participating interest-earning investment contract

Resolution

Measure at fair value

Provide disclosures for

Investment risk

Fair value

128


Situation

Some investment instruments in portfolio highly sensitive to

changes in interest rates

Resolution

Disclose effect on interest rate risk for overall portfolio

Choose a method of interest rate risk disclosure that reflects special

sensitivity, or

Disclose the terms of those instruments

129


Situation

Investment in limited partnership

Foreign currency

Resolution

Foreign currency risk disclosure normally not applicable to

limited partnerships

Exception: functionally equivalent to an investment in foreign

securities

Partnership has significant investments which are all in Japan

130

Cash flows reporting [4.9]

Classification of rental income

Generated by an asset classified as an investment

Cash flows from investing activities

Otherwise

Cash flows from operating activities

Even if reported as nonoperating revenues on the operating statement

131

Financial reporting entity [4.10]

Same rules on eliminations

Primary government total column

Government-wide total column

132


133

Treatment of acquisition of a corporation

Depends on reason for acquisition

To directly enhance the ability to provide services to the public

Evaluate as potential component unit

Investment

Equity interest ownership = investment


General partner in legally separate limited tax credit

partnership (component unit)

Classification of net position

Government (general partner)

Proportionate share of each of the three components of net position

Limited partners

Balance (restricted net position-nonexpendable-minority interest)

134


Primary government serves as trustee for a defined benefit

pension plan

Pension trust fund (if trust)

Agency fund (if not a trust)

Not a potential component unit

135

Pensions [4.14]

Situation

Plan assets may be returned to employer if funded status

reaches specified level

Regardless of whether all plan obligations have been fulfilled

Resolution

Not a trust

Contributions not irrevocable

136

Pensions [4.15]

Fair value reporting unaffected by

Intent to hold debt securities to maturity

Legal restriction that prevents sale below cost

137

Pensions [4.16]

Date for plan disclosure of: 1) number of employees covered

by benefit terms, and 2) benefit terms

Facts as of the end of the plan’s fiscal year

Not facts as of the valuation date

138

Pensions [4.17]

Situation

Single-employer or cost-sharing pension plan

Update to plan reporting date

Resolution

Disclose fact that update took place

Not specific information about the update process

139

Pensions [4.18]

140

Situation

Change in total pension liability resulting from a change in the

discount rate

Resolution

Schedule of changes in the net pension liability

Present as change of assumption or other input

Pensions [4.19]

Date of actuarial valuation used to determine the net pension

liability at the plan’s fiscal year-end

Can vary in relationship to the plan’s fiscal year end from period

to period

Still must fall within 24 months of the plan’s reporting date

141

Pensions [4.20]

Situation

Cost-of-living adjustment (COLA) if investment earnings rate

exceeds actuarially assumed rate

Resolution

Include in projection of benefit payments

Adjusting the long-term expected rate of return used for discounting is

not an acceptable alternative

142

Pensions [4.21]

Plan refunds of employee contributions

Include as a benefit payment when:

Projecting benefit payments to measure the total pension liability

Determining the discount rate

143

Pensions [4.22]

Discount rate for pay-as-you-go funding

Still required to exclude a portion of projected contributions

for purposes of calculating the discount rate (unless closed plan)

Total projected contributions

Less: Portion to finance benefits for future employees

Projected contributions for discount rate

144

Pensions [4.23]

Deferred outflow for employer contributions made after the

measurement date

Component of the change in the net pension liability the

following year

145

Pensions [4.24]

Amortizing pension-related deferred outflows/inflows

Average expected remaining service lives of employees provided

with benefits

For each active and inactive employee

Not a weighted average

146

Investments and investment pools

[4.25]

Investments that pension plans may report at cost or

amortized cost

Nonparticipating interest-earning investment contracts


Participating interest-earning investment contracts with a

remaining maturity of one year or less at the time of purchase

147


[4.26]

Reporting retainage

Fair value (if invested)

If separate fund used

Private-purpose trust fund

Agency fund (if amounts are held only for a short period)

148


[4.27]

Scholarship money temporarily invested in commercial paper

prior to award

Commercial paper = investment

149


[4.28]

Changes in fair value for regulated industries

Option 1(both statement of changes and statement of position)

Report increases and decreases in the operating statement

Reverse them at the end of the statement

Net costs to be recovered from future billings

Report a regulatory amount on the statement of net position

Option 2 (just statement of position)

Ignore the operating statement altogether and simply report a regulatory

amount on the statement of net position

150


[4.29]

Assets purchased for a dedicated purpose can still be

investments

Examples

Restricted assets

Assets in debt service or reserve funds

151


[4.30]

Situation

Bond covenant calls for cash-basis or amortized-cost basis for

some purposes

Determine the amounts to be placed on deposit in reserve funds

Calculate coverage ratios

Resolution

No effect on GAAP reporting

Additional schedules and narrative explanations may be needed to

demonstrate compliance

152


[4.31]

153

Debt security that is not actively traded

Still measure at fair value

Various alternative methods for determining fair value for thinly traded

debt securities


[4.32]

Restrictions on the sale of an asset (effect on fair value)

Specific to the asset itself

Part of calculation of fair value

Example: sale of an asset in a private offering

Specific to the government holding the asset

Not part of the calculation of fair value

Example: assets pledged as collateral

154


[4.33]

Land acquired for conservation purposes and leased for

mineral rights

Aggregation affects classification

Single asset (land + mineral rights)

Capital asset

Separate assets

Land = capital asset

Mineral rights = investment

155


[4.34]

156

Transaction costs

Relevant to determining most advantageous market

Not relevant to determining fair value

Practical result

The most advantageous market may not result in the highest fair

value (!)

Transaction cost: most advantageous

market

157

Transaction costs relevant for determining most advantageous market

Market A $26 sales price

(3) transaction cost

(2) cost to transport to market

$21 net amount received

Market B $25 sales price

(1) transaction cost



Transaction costs: determination of fair

value

Transaction costs not relevant for determining fair value

Market A $26 sales price



Market B $25 sales price



158


[4.35]

Must use principal market unless unable to do so

159


[4.36]

160

Trust land

Income dedicated to supporting public education

Some parcels used for recreational purposes


One unit of account

Capital asset

Parcels reported separately

Some capital assets

Some investments


[4.37]

Examples of capital assets that can produce income

Leased passenger terminals and hangars

Water-treatment plants and distribution systems

Leased easements on state land surrounding a waterway

161


[4.38]

Buildings

Use affects classification

Used exclusively to generate cash

Investment

Rented to individuals to provide low-income housing

Capital asset

162


[4.39]

Office building with several floors rented to retail merchants


Building – single unit

Capital asset

Building – separate unit for each floor

Floors used by government = capital assets

Floors rented out = investment

163


[4.40]

164

Situation

Building

Acquired for use with a grant

Leased out until start of grant

Resolution

Classify based on intent at time of acquisition

Acquired for use = capital asset


[4.41]

Situation

Loans to a housing authority

Fixed term

Interest rate commensurate with market rates

Resolution

Loans for programmatic purposes are not investments

165


[4.42]

“One-year option”


Positions in participating interest-earning investment contracts

Scope

Not available to governmental external investment pools

Application of one-year criterion

When acquired

166


[4.43]

Fair value accounting for deep-discount debt

No need to accrete interest (already reflected in fair value)

167


[4.44]

Situation

Pension plan invests in limited partnership

Partnership calculates net asset value (NAV)

NAV not calculated as of the plan’s reporting date

Resolution

Adjust NAV by “rolling it forward” to the reporting date to take

into account subsequent changes

Capital contributions

Distributions received from the general partner

Changes in the composition of assets or liabilities

Changes in the fair value of assets or liabilities

168


[4.45]

Option to use amortized cost

Entities other than investment pools

Money market investments or participating interest-earning

investment contracts

Based on the time as of acquisition

Investment with a remaining maturity of three months would

not qualify if it was acquired 15 months earlier

169


[4.46]

Fair value of an interest rate swap in a liability position

Consider the effect of the government’s own credit quality and

any other factors that might affect the likelihood that the

obligation will or will not be fulfilled

170


[4.47]

A short sale is an obligation to deliver securities, rather than

an investment

171


[4.48]

Situation

Life insurance contract that covers the lives of employees and

former employees

Government is beneficiary

Resolution

Report at cash surrender value

Death benefits reported as income only upon the death of the

insured

Not actuarially expected or projected basis

172


[4.49]

Brokerage fees and legal fees arising in connection with the

purchase or sale of an investment

Not part of the price of the investment

Expense or expenditure when incurred

173


[4.50]

Investment transactions should be accounted for as of the

trade date

174


[4.51]

Defined benefit pension plans may report an aggregate

amount for investment income

Reporting of separate components not required

175


[4.52]

GASB standards and governmental external investment pools

All standards apply

Most commonly applied

GASB 3 (deposits, investments)

GASB 28 (securities lending)

GASB 34 (reporting model)

GASB 38 (certain note disclosures)

GASB 40 (deposit and investment risk disclosures)

GASB 53 (derivatives)

GASB 62 (FASB and AICPA guidance)

GASB 79 (money market pools)

176


[4.53]

Determination whether capital asset or investment

Normally when asset acquired

Exception: implementation of GASB 72

Facts and circumstances at the time of implementation

177

Financial reporting model [4.54]

Sources for determining acquisition value

Manufacturers’ catalogs

Price quotes in periodicals

Recent sales of comparable assets

Professional assistance not required

178


Infrastructure built and donated by developers

Developer’s cost acceptable method for determining acquisition

value

179


Right-of-way easement on land underlying infrastructure

(not owner of land itself)

Right-of-way asset equivalent to land

Report separately from infrastructure

Report at acquisition value

Use of a nominal value not appropriate

Value of underlying land may be a good measure of acquisition value

180


Land or easements associated with infrastructure

Classify separately from related infrastructure itself


181


The purchase of land for nominal amount equivalent to

donation


182


Prior period adjustment for capital asset not initially

recorded

Report at acquisition value when first acquired

Not current acquisition value

183


Situation

Restricted unspent bond proceeds at year end

Current liability for construction costs

Resolution

Option 1: current asset

Because it can be used to pay a current liability

Option 2: noncurrent asset

Because it must be used for the acquisition or construction of a

noncurrent asset

184


Postemployment plans included in an employer report

Report aggregated data for all plans by fund type

Information for individual plans:

Refer to separately issued plan financial statements; or

Include financial statements for each plan in notes

185


Investment trust funds and pension trust funds can be

reported together in the same financial statement

Even though more detail is required for pension plans

Investment trust funds can either

Display data at the same level as other fiduciary funds

Clearly note on the face of the financial statements that

summarized amounts exclude the more detailed display

provided for pensions

186


187

Situation

Public employee retirement system (PERS)

2 defined benefit pension plans

1 cost-sharing pension plan

1 active employee healthcare plan

1 OPEB plan

Resolution

No requirement for combined statements

Detail on separate postemployment benefit plans

Separate columns for each plan

Separate combining statements in basic financial statements


Possible contents of disclosure of capitalization policy

Capitalization thresholds

Methods used for determining historical cost or acquisition

value

Extent of infrastructure capitalization

188

OPEB [4.65]

Postemployment healthcare benefits always classified as

OPEB

Reported separately by both plan and employers

189

OPEB [4.66]

Postemployment benefits (other than healthcare) provided

through a pension plan

Treat as a pension benefit by both the employer and the plan

190

Derivatives [4.67]

Derivative instrument that no longer qualifies as a hedging

derivative

Automatically becomes investment derivative instrument

All disclosures that apply to investments, derivatives, and fair

value

191

Derivatives [4.68]

Investments underlying synthetic guaranteed investment

contracts (SGICs)

Provide risk disclosures (GASB 40)

Provide investment disclosures (GASB 72)

192

IRC Section 457 Deferred

Compensation Plans [4.69]

Situation

IRC Section 457 deferred compensation plan purchases annuity

contracts in the name of individuals

Resolution

Equivalent to an allocated insurance contract

Government reports neither an asset for the contracts themselves, nor the

related liabilities

Benefit payments = amounts paid to the insurance company

193

Nonexchange transactions [4.70]

Donated food commodities

Nonexchange transaction

Recognize revenue

As soon as all eligibility requirements met

o Typically in the period received

Acquisition value of donated commodities

194

Nonexchange transactions [4.71]

Donation of a capital-type asset to a governmental fund

For use in operations (capital asset)

No asset or revenue

For sale

Asset and revenue in the fund that receives the proceeds

195

Intangible assets [4.72]

Intangible assets that qualify as investments

Subject to same fair value rules as other types of investments

196

Governmental fund-type definitions

[4.73]

Situation

Storm water fees that are restricted to storm water activities

(capital or operating)

Anticipated ongoing subsidy = 25%

Fees not designed to recover depreciation or debt service

Resolution

Special revenue fund may be used

Capital projects fund not required

Enterprise fund not required

197

Service concession arrangements

[4.74]

Situation

Service concession arrangement (SCA)

Agreed-upon rates that may be imposed on SCA customers

Resolution

Meets criterion that government must retain the ability to

modify or approve prices

198

Items previously reported as assets

and liabilities [4.75]

Insurance component of bond issuance cost

Amortize as interest expense

Not insurance expense

Rationale

Insurance purchased to obtain lower interest rate

199

Nonexchange financial guarantees

[4.76]

Receivable recognized by blended component unit

Amount of liability, but

Continue to evaluate for collectability

200

Tax abatement disclosures [4.77]

Situation

Government uses tax increment financing (TIF) to encourage

economic development

Issues bonds to finance infrastructure

Sales tax revenues that exceed a baseline set aside for bond

repayment

Resolution

TIFs not automatically tax abatements

Earmarks rather than reduces taxes

No agreement that requires performance

201


Situation

Business allowed to retain 40% of state sales tax collected from

customers

Technically, sales tax is a tax on the customer, not the business

The state is not reducing the business’s tax

The state is allowing the business to keep a portion of someone else’s tax

payable to the state

Resolution

Tax abatement because state foregoes revenue

202


Situation

Tax abatement requires that the agreement precede

performance by counterparty

Tax abatement starts prior to performance

Resolution

It is a tax abatement

It is the agreement that must precede performance

The abatement itself can occur earlier

203


Situation

State abates gas tax for companies that go green

Affects shared revenue of local governments

Resolution

Tax abatement for state

Reduces state tax revenue

Not a tax abatement for local governments

Shared revenue is not a tax of the recipient

Reduction of shared revenue is not a reduction of tax

204


Situation

3 major programs = 20 agreements

5 remaining agreements

Resolution

Disclosure for 5 remaining agreements depends on how major

programs were presented

Information presented in the aggregate for each major program?

Information presented in aggregate for remaining 5

Quantitative threshold used to disclose individual agreements for major

programs?

Same quantitative threshold applies to remaining 5

205


Situation

For government’s own programs

Uses quantitative threshold for individual agreements

Resolution

For agreements of other governments

May use different quantitative threshold

May present information in the aggregate

206


Situation

State law prohibits disclosure of aggregated tax information that

relates directly or indirectly to a taxpayer’s income or earnings

Resolution

Disclose whatever information is not prohibited by state law

Describe the type of information omitted and cite state law that

prevents inclusion

207

Question 12

Investment disclosures would be required for which of the

following?

A. Cash with fiscal agent

B. Amounts held as a fiduciary or custodian

C. Securities held in escrow for refunded debt

D. All of the above

E. Both A and B

208

Question 13

How should rental income be classified in a statement of cash

flows?

A. Cash flows for operating activities

B. Cash flows from investing activities

C. Either A or B, depending on the circumstances

209

Question 14

Which of the following factors would affect whether an

investment in debt securities should be measured at fair value?

A. Intent to hold to maturity

B. Legal restriction that prevents sale below cost

C. Both of the above

D. None of the above

210

Question 15

How should land acquired for conservation purposes and leased

for mineral rights be classified?

A. Capital asset

B. Investment

C. Both A and B

D. Either A or C

211

Question 16

A local government must provide tax abatement disclosures if a

state abatement of tax revenues to a third party affects the

amount of shared revenue the local government will receive.

A. True

B. False

212

Update on Reporting Model Review

Part IV

213

Some conclusions to date

214

Financial reporting model is essentially sound

Existing structure of governmental funds provides an

appropriate link to budgetary reporting

Governmental funds should have a short-term focus

Fiduciary activities should be reported only as fiduciary funds

Ongoing issues

215

1. Reporting for governmental funds

2. Budgetary comparison reporting

3. Classification of operating and nonoperating revenues and

expenses

4. Classification and measurement focus for permanent funds

5. Some other issues

1. Reporting for governmental funds

216

Measurement focus

Current guidance

Current financial resources measurement focus

Issue

Need for a more conceptually consistent approach

Near-term financial resources approach

Working-capital approach

Total financial resources approach

Near-term financial resources

approach

217

Symmetrical recognition - 60 days

Assets include

Receivable at period-end and due to convert to cash within the

near term

Cash and other financial resources that are available to be

converted to cash within the near term

Liabilities include

Obligations normally payable at period-end and due within the

near term

Changes from current practice

218

Examples:

Prepaids and inventories

Do not report (no option to use consumption method)

Special assessment receivables

Recognize asset only for portion due in near term

Accrued interest on long-term debt

Liability for interest accrued at year end and due in near-term

Short-term operational borrowings (e.g., TANs)

Inflow of resources (vs. fund liability)

Working-capital approach

219

Symmetrical recognition – 1 year

Assets include

Receivable at period-end and due to convert to cash within the

next year

Cash and other financial resources that are available to be

converted to cash within the next year

Prepaids and inventories (consumed in next year)

Liabilities include

Obligations normally payable at period-end and due within the

next year


220

Examples:

Prepaids and inventories

Must report as assets if consumed within one year

Special assessment receivables

Recognize asset only for portion due in one year

Accrued interest on long-term debt

Liability for interest accrued at year end and due in one year

Long-term debt

Liability for amount due in the following year

Would require statement of cash flows

Total financial resources approach

221

Symmetrical recognition

Full accrual except for capital assets and capital-related debt

Assets include

All accrual-based assets except capital assets

Liabilities include

All accrual-based liabilities except capital-related debt


222

Examples:

Include long-term debt that is not capital related

Include net pension liability and net OPEB liability

Classified presentation

Would require statement of cash flows


223

Communication method

Current guidance

Either basic financial statement or RSI

Issue

Should that option continue?

If not, what communication method should be used?


224

Presentation of budgetary variances

Current guidance

Encourage reporting of budgetary variances

Issue

Should variance reporting be required?

If so which variances?

Final budget and actual

Original budget and final budget

Other variances

3. Classification of operating and

nonoperating revenues and expenses

225

Current guidance

Distinguish

Disclose policy used to distinguish

Issue

Should more guidance be provided on how to distinguish?

4. Classification and measurement

focus for permanent funds

226

Current guidance

Report as governmental funds

Use same measurement focus

Issue

If either the near-term financial resources measurement focus

or the working capital measurement focus is selected, should

there be a change?

No longer report as governmental funds

Report as governmental funds, but use a different measurement focus

5. Other issues

227

MD&A

Enhance analysis component

Eliminate boilerplate

Clarify guidance on known facts, decisions, or conditions that are

expected to have a significant effect on financial position or results of

operations

Government-wide financial statements

Format

Statement of cash flows

Additional information about debt service funds

Project calendar

228

Invitation to comment (ITC) – 4Q16

Preliminary views (PV) – 3Q18

Exposure draft (ED) – 2Q20

Final statement – 4Q21

Reporting deficiencies

Part V

229

Employer pension display

230

Do not net pension-related deferred outflows/inflows of

resources except in the case of deferred amounts that result

from differences between estimated and actual investment

earnings

Do not net assets and liabilities of different plans

Report the entire amount of the net pension liability as a

noncurrent liability

Full amount reported as as “due in more than one year”

Employer pension disclosure

231

Disclose whether the pension plan is a single-employer, agent

multiple-employer, or cost-sharing multiple-employer

defined benefit plan

Disclose whether the pension plan issues a stand-alone

financial report (and if so, how to obtain it)

Disclose the total amounts (if not otherwise identifiable) of

Pension liabilities

Pension assets

Deferred outflows/inflows of resources

Pension expense


232

Disclose changes in the net pension liability for single-employer

and agent multiple-employer plans

Inclusion in RSI insufficient

Disclose actuarial assumptions and other inputs (e.g., dates of

the experience studies, source of mortality assumptions)

The balances of pension-related deferred outflows and deferred

inflows disclosed in the notes should be traceable to the

statement of net position


233

The amounts of net pension liabilities and/or net pension

assets disclosed in the notes should articulate to the

statement of net position

The schedule of deferred outflows/inflows that will be

recognized in pension expense for each of the subsequent five

years and in the aggregate thereafter should exclude

employer contributions subsequent to the measurement date

of the net pension liability


234

Should not include GASB Statement 27 disclosures (e.g.,

three year trend data for annual pension cost and funded

status and progress for the most recent actuarial valuation)

Should distinguish amounts for the primary government and

amounts for discretely presented component units (e.g.,

sensitivity analysis and changes in the net pension liability)

Employer pension RSI

235

Should include a schedule of employer contributions

Should report employer contributions as of the employer’s

fiscal year end rather than as of the measurement date

Should include covered employee payroll as of the employer’s

most recent fiscal year end rather than as of the measurement

date

Employer pension RSI

236

Should include all the related ratios for

Schedule of changes in net pension liability for single and agent

employers and

Schedule of the employer’s proportionate share of the net

pension liability

Should refrain from providing GASB 27 trend information on

funding progress

Cost-sharing employers should not include the RSI for the

entire plan, in addition to the employer’s specific RSI

Management’s discussion and analysis

(MD&A)

237

Should provide an analysis for all major funds to disclose the

reasons for significant changes in fund balances

Should provide an analysis of significant variations in the

general fund between

Final budget amounts and actual budget amounts

Original and final budget amounts

Should report deferred outflow/inflows of resources

separately from assets and liabilities in the condensed

financial statements

Calculation of net investment in capital

assets

238

Should exclude unspent debt proceeds

The liability related to the unspent portion of a debt issuance

should be included in the same component of net position as

the unspent proceeds

Should include deferred amounts from refundings in the

calculation

Should include all the capital assets (e.g., land and

construction in progress)

Should include capital related debt (e.g., retainage payable)

Statement of net position

239

Should differentiate between unearned revenues (liability)

and deferred inflows

Should report deferred outflows/inflows separately from

assets/liabilities

Reporting unavailable revenue

Governmental funds

240

Should report as major funds any fund that meets the criteria for the current fiscal year

Remember to include deferred inflows and deferred outflows when calculating major funds

Should report restricted, committed, or assigned fund balance by purpose, rather than by function

Should include a budgetary comparison for a major special revenue fund when the government legally adopts an annual or bi-annual budget for the fund

Should report long-term notes and loans receivable as restricted, committed, or assigned in funds other than the general fund

Proprietary funds

241

Capital contributions are reported as nonoperating revenues

on the statement of revenues, expenses, and changes in net

position (despite being reported correctly as capital grants and

contributions on the statement of activities)

Should report capital grants and contributions as capital

contributions rather than as nonoperating revenue

Normally reported correctly as capital grants and contributions in

the government-wide statement of activities

Disclosure – blended component units

242

Why a component unit is blended

All relevant criteria need to be disclosed

Share a governing body +

Financial benefit or burden?

Operational responsibility?

Application of wrong criteria

Imposition of will

Fiscal dependency

Disclosure – discretely presented

component units

243

Why a component unit is discretely presented

All relevant criteria need to be disclosed

Fiscal dependence +

Also require financial benefit or burden

Other note disclosures

244

Should include the pledged revenue disclosures from

paragraph 21 in GASB 48

Should disclose significant encumbrances by major funds and

nonmajor funds in conjunction with required disclosures

about other commitments

Should disclose the purpose of interfund balances

Should describe principal purposes of interfund transfers

RSI

245

Should disclose the budgetary basis in the notes to RSI when

a general and major special revenue funds budgetary

comparisons are reported as RSI

Budgetary reporting in Other

Supplementary Information

246

If legally adopted annual budget, should include

Nonmajor special revenue funds

Debt service funds

Capital projects funds that have legally adopted annual budgets

Should report at the legal level of budgetary control

Statistical section

247

Amounts presented in the debt capacity schedules should be

the same amounts reported in the basic financial statements

Should include premiums and discounts in the statistical section

Should include narratives to describe atypical changes and

anomalous data

Example: effect of implementing GASB Statement 68 on the

net position

Should include all the debt for governmental activities in the

direct and overlapping debt table

Statistical section

248

Calculate the ratio of debt service as a percentage of

noncapital expenditures correctly

Should use the capital outlay amount from the reconciliation of

the statement of revenues, expenditures and changes in fund

balances to the statement of activities

Should include debt service expenditures in noncapital

expenditures

Amounts should trace to the basic financial statements

Question 17

The presentation of the net pension liability should distinguish

amounts “due within one year” from amounts “due in more than

one year.”

A. True

B. False

249

Question 18

The netting of pension-related deferred outflows and inflows of

resources is:

A. Always required

B. Always prohibited

C. Normally prohibited, but sometimes permitted

250

Question 19

Employers that participate in cost-sharing pension plans should

provide RSI for:

A. Their proportionate share

B. The entire plan

C. Both

251

Question 20

Restricted, committed, and assigned fund balance should be

reported by:

A. Function

B. Purpose

C. Both

D. Either A or B

252

GASB Technical Agenda

Part VI

253

Topics

254

Other GASB technical agenda projects

Setting priorities

Research activities

255

Equity interest ownership issues

Going concern disclosures reexamination

Note disclosure reexamination

Potential projects

256

Emissions trading (carbon credits)

Exchange and exchange-like financial guarantees

Financial transactions with characteristics of both loans and

grants

Impairments of assets other than capital assets

In-kind contributions

Interim financial reporting

Investment fees

Popular reporting

Potential projects (cont.)

257

Present value

Preservation method

Reporting unit presentations

Social impact bonds

Social security disclosures

Mark your calendar

258

2017 GFOA Annual Governmental GAAP Update

Thursday, November 2, 2017

Thursday, December 7, 2017

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