GOVERNMENT ACCOUNTING STANDARDS UPDATE (AND OTHER)

Transcription

1 GOVERNMENT ACCOUNTING STANDARDS UPDATE (AND OTHER) JOHN M. SCHUBERT, CPA, CM SENIOR DIRECTOR OF FINANCE TUCSON AIRPORT AUTHORITY CHAIR ACI-NA ACCOUNTING AND FINANCING WORKING GROUP JUNE 11, 2018

2 GOVERNMENTAL ACCOUNTING STANDARDS BOARD (GASB) GASB has been extremely busy and has a very full calendar of current and proposed projects. There approach, their objective is on the user/reader side of the financial statements. It is an academic, research oriented point of view. The cost of implementation and ongoing accounting/reporting compliance and business impact are secondary.

3 GASB STATEMENT NO. 75 ACCOUNTING AND FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS, JUNE 15, 2017 Similar presentation and disclosure requirements as required under GASB 68: Net OPEB liability Deferred outflows of resources and deferred inflows of resources (changes in the components of the net OPEB liability) OPEB expense Significant financial statement disclosures and required supplementary information

4 GASB STATEMENT NO. 85 OMNIBUS 2017, JUNE 15, 2017 COVERED SIX AREAS: 1. Blending component units (BTA reporting) 2. Goodwill and negative goodwill 3. Fair value measurement and application 4. Employer accounting and reporting for pensions 5. Employer accounting and reporting for OPEB 6. Reporting by OPEB plans

5 GASB STATEMENT NO. 86 CERTAIN DEBT EXTINGUISHMENT ISSUES JUNE 15, 2017 Debt Extinguishment Using Only Existing Resources New standard: 1. Provides consistency with accounting and reporting for debt defeasances using existing resources with that for refunding, 2. Changes accounting for prepaid insurance on defeased debt, and 3. Requires disclosures related to risk of substitution of monetary assets in defeasance escrow.

6 IMPLEMENTATION GUIDE NO , ACCOUNTING AND FINANCIAL REPORTING FOR POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS (AND CERTAIN ISSUES RELATED TO OPEB PLAN REPORTING), JUNE 15, 2017 Questions and answers regarding implementation of GASB 75 Questions and answers regarding implementation of GASB 74, after IG was already issued

7 IMPLEMENTATION GUIDE NO , IMPLEMENTATION GUIDANCE UPDATE , JUNE 15, 2017 (OTHER) Pensions OPEB Basic Financial Statements and MD&A CAFR Statistical Section Deposits and Investments Regulated Operations and Tax Abatements

8 GASB STATEMENT NO. 83 CERTAIN ASSET RETIREMENT OBLIGATIONS, JUNE 15, 2018 Asset retirement obligation (ARO) Legally enforceable liability associated with the retireme nt of a tangible capital asset Governmental Funds No Change Economic Resources MF - Determination of Recognition Recognize when a liability is incurred and the amount is reasonably estimable. Incurred if two events occurred: Occurrence of external obligating event Occurrence of internal obligating event

9 EXTERNAL OBLIGATING EVENTS Sources of ARO obligations: Approval of laws and regulations establishing disposal requirements Creation of a legally binding contract Issuance of a court judgment

10 INTERNAL OBLIGATING EVENTS Events that trigger obligations: A. Acquisition B. Contamination (based on normal usage) C. Pattern of usage D. Not based on usage E. Abandonment

11 GASB 88 CERTAIN DISCLOSURES RELATED TO DEBT, INCLUDING DIRECT BORROWINGS AND DIRECT PLACEMENTS JUNE 15, 2018 Establishes new note disclosure requirements for long term debt, including direct borrowings and placements. Amount of unused lines of credit Assets pledged as collateral for debt Terms specified in debt agreements related to significant: Events of default with finance related consequences, Termination events with finance related consequences, and Subjective acceleration clauses. Separate information in debt disclosures for Direct borrowings and direct placements of debt Other debt

12 GASB STATEMENT NO. 84 FIDUCIARY ACTIVITIES December 15, 2018 Not covered Beyond scope and time of presentation Limited applicability

13 CAPITALIZATION OF INTEREST COSTS December 15, 2019 Interest cost incurred during the period of construction is recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. Interest cost incurred during a period of construction would no longer be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund.

14 xpense ecognition GASB PROJECTS IN VARIOUS STAGES OF RESEARCH AND DELIBERATION Conceptual Framework: Recognition Financial Reporting Model Reexamination of Statements 34, 35, 37, 41, and 46 and Interpretation 6 Public-Private Partnerships, including reexamination of Statement 60 Revenue and Expense Recognition Conduit Debt-Reexamination of Interpretation 2 Equity Interest Ownership Issues Implementation Guide for Statement 84 on Fiduciary Act Implementation Guide for Statement 87 on Leases Information Technology Arrangements including Cloud Computing

15 OMB UNIFORM GUIDANCE IMPLEMENTATION CURRENT DEVELOPMENTS OMB Uniform Guidance Implementation Current Developments Uniform Guidance Implementation Current Developments OMB released M on June 15, 2017 Reduces burden for federal agencies OMB issued latest round of FAQs in July new FAQs bringing total to Compliance Supplement A skinny supplement President s Management Agenda March 2018 Draft 2019 SF SAC (Data Collection Form) April 2018 Proposed Rule change expected in summer 2018

16 GOVERNMENT AND AICPA STANDARDS UPDATE GAO s Government Auditing Standards (Yellow Book) 2018 AICPA SAS No. 132 Going Concern AICPA SAS No. 133 Exempt Offering Documents AICPA ED Auditor Reporting AICPA Proposed SSAE: Selected Procedures AICPA Professional Ethics Division: State and Local Government Entities