 Show GASB is seeking comments on those views before developing more-detailed proposals for changes to existing accounting and financial reporting standards. Comments are due Sept. 17. The board said it will begin deliberations in July on pension note disclosures and supporting information for government employers and pension plan reporting issues. The Preliminary Views document is part of the board’s overall project to consider improvements to the existing standards of accounting and financial reporting for postemployment benefits. GASB periodically reviews its standards to determine whether they continue to effectively meet their objectives. GASB said most of the issues in the Preliminary Views benefited from constituent feedback received in response to the board’s March 2009 Invitation to Comment, Pension Accounting and Financial Reporting. The board received written comments from nearly 120 individuals and organizations and held two days of public hearings. The board addressed the feedback it received in developing its Preliminary Views. The Preliminary Views document is available at tinyurl.com/2fznkcq. GASB also released a plain-language supplement, which is available at tinyurl.com/2g26w3n, to assist users of financial statements in commenting on the Preliminary Views. GASB will host public hearings on the Preliminary Views on Oct. 13, 8:30 a.m. CDT at the Hyatt Regency Dallas-Fort Worth Airport in Dallas; Oct. 14, 8:30 a.m. PDT at the offices of KPMG in San Francisco; and Oct. 27, 8:30 a.m. EDT at the Crowne Plaza LaGuardia in New York City. Go to gasb.org for details and instructions for registering to participate in the hearings. Under the revised ED: (1) Arrangements in which control is transferred to the operator are not subject to the requirements of the proposal; and (2) consideration from an operator will be reported by the transferor as a deferred inflow of resources, reduced by any liabilities incurred by the transferor in the arrangement. The project’s objective is to provide accounting and financial reporting guidance for service concession arrangements (SCAs), which are a subset of public-private partnerships. This involves determining whether existing authoritative guidance is sufficient to address accounting and financial reporting issues resulting from SCAs, or whether new standards are necessary. An SCA is an arrangement between a transferor (a government) and an operator (governmental or nongovernmental) in which (1) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a “facility”) and (2) the operator collects and is compensated from fees from third parties. Recent examples of SCAs include long-term arrangements associated with toll roads, hospitals and student housing. The original ED included arrangements in which the transferor did not retain control of the facility subject to an SCA, and used the control criteria to determine what the accounting should be, distinguishing between arrangements in which control was retained or transferred. In the revised ED the control criteria (determination of services, clientele, and prices and entitlement to a significant residual interest in the facility) are now included as a scope criterion. As a result, arrangements in which control is transferred to the operator would not be subject to the requirements of the proposed statement. The original ED also proposed that transferors report a liability upon commencement of an SCA for consideration received (such as upfront payments, or installment payments received from an operator or an operator-provided facility). After considering feedback and further discussions of the definitions in Concepts Statement no. 4, Elements of Financial Statements, the board concluded that the consideration from an operator would be more appropriately reported by the transferor as a deferred inflow of resources, reduced by any liabilities incurred by the transferor in the arrangement. The revised ED is available at tinyurl.com/23t7kbc.
Statement no. 59 includes the following guidance:
GASB Statement no. 59 can be purchased at gasb.org. More from the JofA: What does Interperiod equity mean?4, Elements of Financial Statements , the GASB added a description of interperiod equity as “the state in which current period inflows of resources equal current period cost of services.” When this is achieved, it goes on to say, “the burden of the cost of [current period] services is borne by present-year taxpayers ...
How does Interperiod equity relate to accountability?Q: How does “interperiod equity” relate to accountability? A: Interperiod equity is a government's obligation to disclose whether current- year revenues were sufficient to pay for current-year benefits—or did current citizens defer payments to future taxpayers?
What is a good Interperiod equity ratio?Interperiod equity Total margin ratio A ratio of one or higher indicates that a government lived within its financial means. Financial performance Percent change in net assets A positive percent change indicates that a government's financial position improved.
What are the two objectives of financial reporting for governmental units?According to GASB [1987], “governmental financial reporting should provide information to assist users in (a) assessing accountability and (b) making economic, social, and political decisions” (par.
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What is meant by Interperiod equity and what is its consequence for financial reporting?
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