NEWS RELEASE 1/8/01
GASB Proposes Clarification of Certain Provisions of Statement 34
Norwalk, CT, January 8, 2001—The Governmental Accounting Standards Board (GASB) has released an Exposure Draft of a proposed standard that would amend certain provisions of GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments. The Exposure Draft, entitled Basic Financial Statements-and Management’s Discussion and Analysis-for State and Local Governments Omnibus, proposes changes that are intended either to clarify provisions or to modify them for more consistent application.
Among the provisions clarified by the Exposure Draft are:
- Requirements for the contents of management’s discussion and analysis (MD&A);
- The financial reporting effect of changing to the modified approach for reporting infrastructure;
- Classification of program revenues, including fines and forfeitures; and
- Major fund criteria.
In addition, modifications to the requirements of Statement 34 include elimination of the requirement to capitalize construction period interest for governmental activities, and changing the minimum level of detail required for business-type activities in the statement of activities from segments to different identifiable activities. The Exposure Draft also includes proposed amendments to GASB Statement No. 21, Accounting for Escheat Property, that are necessary because of the changes to the fiduciary fund structure required by Statement 34.
"The Exposure Draft essentially fine-tunes a few of the provisions of Statement 34," said Ken Schermann, GASB Senior Project Manager. "All of the proposed changes are consistent with the Board’s original intentions when the Statement was written."
Statement 34 establishes new requirements for the annual financial reports of state and local governments. The Statement was developed to make annual reports easier to understand and more useful to those who use governmental financial information to make decisions.
The provisions of the Exposure Draft would be simultaneously implemented with Statement 34. For governments that implemented Statement 34 prior to the issuance of this Statement, its requirements would be effective for financial statements for periods beginning after June 15, 2000.
Written comments about the proposals in the Exposure Draft should be submitted by March 16, 2001. The Exposure Draft is accessible by visiting the GASB’s Web site at www.gasb.org. Copies of the draft may be obtained by contacting the GASB Order Department at 800-748-0659, via e-mail at email@example.com, or, by mailing to 401 Merritt 7, PO Box 5116, Norwalk, CT 06856-5116.
About the Governmental Accounting Standards Board
The GASB is the independent, not-for-profit organization, formed in 1984, that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its Web site www.gasb.org.