News Release 02/11/16
GASB ISSUES GUIDANCE ON BLENDING CERTAIN COMPONENT UNITS INTO FINANCIAL STATEMENTS
Norwalk, CT, February 11, 2016—The Governmental Accounting Standards Board (GASB) today issued GASB Statement No. 80, Blending Requirements for Certain Component Units. The Statement is intended to provide clarity about how certain component units incorporated as not-for-profit corporations should be presented in the financial statements of the primary state or local government.
Statement 80 clarifies the display requirements in GASB Statement No. 14, The Financial Reporting Entity, by requiring these component units to be blended into the primary state or local government’s financial statements in a manner similar to a department or activity of the primary government. The guidance addresses diversity in practice regarding the presentation of not-for-profit corporations in which the primary government is the sole corporate member.
While this Statement applies to a limited number of governmental units, such as public hospitals, it is meant to enhance the comparability of financial statements among those units and improve the value of this information for users of state and local government financial statements.
The requirements of the Statement are effective for reporting periods beginning after June 15, 2016, with earlier application encouraged.
The full text of Statement 80 is available at www.gasb.org.
About the Governmental Accounting Standards Board
Established in 1984, the GASB is the independent, private-sector organization based in Norwalk, Connecticut, that establishes accounting and financial reporting standards for U.S. state and local governments that follow Generally Accepted Accounting Principles (GAAP). These standards are recognized as authoritative by state and local governments, state Boards of Accountancy, and the American Institute of CPAs (AICPA). The GASB develops and issues accounting standards through a transparent and inclusive process intended to promote financial reporting that provides useful information to taxpayers, public officials, investors, and others who use financial reports. The Financial Accounting Foundation (FAF) supports and oversees the GASB. For more information, visit www.gasb.org.