This is the next big GASB pronouncement that we should start preparing ourselves for. It will likely be released early 2024 as GASB No. 103. None of this is final and could change before the pronouncement is released; however, this does give you a flavor of what is to come.
This is the next big GASB pronouncement that we should start preparing ourselves for. It will likely be released early 2024 as GASB No. 103. None of this is final and could change before the pronouncement is released; however, this does give you a flavor of what is to come.
Below are highlights of the proposed changes.
Government Fund Financial Statements
- The short-term financial resources measurement focus is going to replace the current financial resources measurement focus.
- Governmental fund financial statements will be renamed the Short-term Financial Resources Balance Sheet and the Statement of Short-term Financial Resources Flows.
- The “flows” in the Statement of Short-term Financial Resources Flows will be separated between current and noncurrent based on the terms of an underlying binding arrangement, or estimated payments.
- The measurement of transactions will begin on the inception date of the transaction with the cutoff for short-term being one year (not 60 days).
Proprietary Fund Financial Statements
- Nonoperating revenues and expenses have been defined as:
- Subsidies received and provided,
- Revenues and expenses relating to financing,
- Resources from the disposal of capital assets and inventory,
- Investment income and expenses, and
- Contributions to permanent and term endowments.
- Exceptions will be made for certain loan programs which will classify interest revenue as operating and interest expense as nonoperating.
- Subsidies has been updated to now include transfers and flows that a direct or indirect impact on user fees and charges.
- Subsidies will be classified as noncapital subsidies unless clearly for capital purposes. Noncapital subsidies will have their own separate subtotal.
Management’s Discussion and Analysis
- The MD&A provisions appear to be headed toward a reemphasis of the word “analysis” of year-to-year changes.
- The level of the analysis will be “thorough” including the relative size of the reasons for the change.
- A reemphasis of the avoidance of unnecessary duplication of what is in the notes to the basic financial statements.
- The MD&A appears to be including significant capital asset activity, but all long-term financing activity as part of the analysis.
- Descriptions of currently known facts, decisions, or conditions that are expected to have a significant impact on financial position, or the results of operations will include additional examples such as trends in demographics, unemployment, and defined benefit plans.
- Budgetary analysis of significant variances will be moved to the notes to the RSI.
Special Items and Extraordinary Items
- These will be replaced with unusual or infrequent items.
- Notes to the basic financial statements will include information regarding whether the event is within the control of management.
Required Supplementary Information
- Budgetary analysis of significant variances will be moved to the notes to the RSI.
- The budgetary schedules in the RSI will include variances between the original and final budget amounts AND final budget and actual amounts.
Effective dates have not been determined for any of these proposed changes.