GASB Proposes Postponement of Effective Dates
Recognizing the challenges posed by the COVID-19 pandemic, the Governmental Accounting Standards Board (GASB) is proposing to postpone the effective dates in almost all Statements and Implementation Guides due to be implemented by state and local governments for fiscal years 2019 and later.
The exposure draft - Postponement of the Effective Dates of Certain Authoritative Guidance - was issued April 15, 2020 and is intended to provide relief to governments.
The proposal would postpone the effective date by one year in the following pronouncements:
- Statement No. 83, Certain Asset Retirement Obligations.
- Statement No. 84, Fiduciary Activities.
- Statement No. 87, Leases.
- Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements.
- Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period.
- Statement No. 90, Majority Equity Interest.
- Statement No. 91, Conduit Debt Obligations.
- Statement No. 92, Omnibus 2020, Paragraphs 6–10 and 12.
- Statement No. 93, Replacement of Interbank Offered Rates, Paragraphs 13 and 14.
- Implementation Guide No. 2017-3, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting), Questions 4.85, 4.103, 4.108, 4.109, 4.225, 4.239, 4.244, 4.245, 4.484, 4.491, and 5.1–5.4.
- Implementation Guide No. 2018-1, Implementation Guidance Update—2018.
- Implementation Guide No. 2019-1, Implementation Guidance Update—2019.
- Implementation Guide No. 2019-2, Fiduciary Activities.
- Implementation Guide No. 2019-3, Leases.
The GASB is working on an expedited schedule to issue this guidance. The exposure draft has a comment period deadline of April 30, 2020, with the Board then scheduled to review feedback and consider a final statement for issuance on May 8, 2020.
What does this mean for you?
For many governments the two standards with the greatest impact on financial reporting are GASB Statement No. 84, Fiduciary Activities and GASB Statement No. 87, Leases.
The postponement of the effective dates for one year will allow adequate time for the government organizations to properly prepare to implement these standards. The proposal will have its greatest impact on organizations with fiscal year ends after March 31, 2020 and calendar year-end organizations who have not yet completed their financial statements. If you have already implemented GASB Statement No. 84, Fiduciary Funds, you have nothing to worry about, as early application is encouraged for the pronouncements within the proposal.
If you have questions on how this proposal may affect your organization, please contact a member of the Herbein government auditing team, or email us at email@example.com.
Article compiled by Christopher Turtell.