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GASB Statement Number 54 Revisited

GASB Statement Number 54 Revisited. Dennis J. Osuch, CPA Partner August 9, 2012. GASB #54 Training Video. Objectives. GASB 54 Overview. Fund Balance Classifications. Fund Balance Classifications. Key Items Related to New Fund Balances. Converting Governmental Fund Balances. Yes.

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GASB Statement Number 54 Revisited

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  1. GASB Statement Number 54 Revisited Dennis J. Osuch, CPA Partner August 9, 2012

  2. GASB #54 Training Video

  3. Objectives

  4. GASB 54 Overview

  5. Fund Balance Classifications

  6. Fund Balance Classifications

  7. Key Items Related to New Fund Balances

  8. Converting Governmental Fund Balances • Yes Is it spendable? Are there constraints imposed by outside parties? Restricted Yes Yes No No Non-spendable Did council set aside funds prior to year end? Committed Yes No Did finance set aside funds? Yes Assigned No Unassigned

  9. Classification of Fund Types

  10. The General Fund Note: Only the general fund reports positiveunassigned fund balance Records and reports all financial resources not recorded and reported in another fund (i.e. capital project, special revenue, and debt service). Basically same definition as pre-GASB #54 but very possible some old special revenue funds will now be reported in the General Fund

  11. Special Revenue Fund Evaluation

  12. Special Revenue Funds: Fund Balances

  13. Debt Service Fund

  14. Capital Project Fund

  15. Rain Day (Stabilization) Funds

  16. GASB 54 Says………. Economic stabilization is a specific purpose and “…..amounts constrained to stabilization would usually meet that criterion for inclusion in the committed or restricted fund balance classifications of the general fund.”

  17. Requirements for Reporting Rainy Day Funds

  18. Change in Fund Balance Reporting

  19. Financial Statement Reporting

  20. Quiz True or False? • Committed fund balances can only be reported in the financial statements if the board/council commits fund balances prior to the report date 2. The General Fund is the only fund that can report a positive unassigned fund balance 3. Rainy Day Funds can be reported as part of the General Fund or as a separate Special Revenue Fund 4. A government can report a fund as a Special Revenue Fund, even though it does not have a committed revenue source, if the board/council has authorized a specific dollar amount to be transferred to that fund each year

  21. Road and Bridge Fund Example 50,000 restricted for grants 10,000 committed for new shop 30,000 assigned for equipment replacement 10,000 assigned for technology

  22. Road & Bridge – Scenario #1 Spend $35,000, using local funds to replace equipment Result: $0 assigned for equipment replacement $5,000 assigned for technology $10,000 committed for new shop $50,000 restricted for grants

  23. Road & Bridge – Scenario #2 Spend: $50,000 using local funds to replace equipment Result: $0 assigned for equipment replacement $0 assigned for technology $10,000 committed for new shop $50,000 restricted for grants ($10,000) unassigned

  24. Communicating GASB 54 to Council

  25. Items to Consider When Writing a Fund Balance Policy

  26. Fund Balance Policy

  27. Going Forward

  28. Subsequent GASB Pronouncements • GASB Statement 66 Technical Corrections – 2012 – an amendment of GASB Statements No. 10 and No. 62 • Effective Date: Periods beginning after December 15, 2012 • GASB Statement 65 Items Previously Reported as Assets and Liabilities • Effective Date: Periods beginning after December 15, 2012 • GASB Statement 64 Derivative Instruments: Application of Hedge Accounting Termination Provisions – an amendment of GASB Statement No. 53 • Effective Date: Periods beginning after June 15, 2011 • GASB Statement 63 Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position • Effective Date: Periods beginning after December 15, 2011

  29. Subsequent GASB Pronouncements • GASB Statement 62 Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements • Effective Date: Periods beginning after December 15, 2011 • GASB Statement 61 The Financial Reporting Entity: Omnibus an amendment of GASB Statements No. 14 and No. 34 • Effective Date: Periods beginning after June 15, 2012 • GASB Statement 60 Accounting and Financial Reporting for Service Concession Arrangements • Effective Date: Periods beginning after December 15, 2011

  30. Questions or Comments?

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