Project Pages

Omnibus

Project Description: The objective of this proposed project is to address various technical corrections and other practice issues that have been identified in practice.

Status: Initial Deliberations Omnibus—Project Plan

Background: The project will address the following issues:

Remeasurement of Certain Assets and Liabilities

Statements No. 87, Leases; No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements; and No. 96, Subscription-Based Information Technology Arrangements, each provide that the asset or liability (as applicable in the context of each pronouncement) is not required to be remeasured solely for a change in an index or a rate used to determine variable payments. This project would address the appropriate reporting of those transactions when that circumstance is encountered.

Effect of a Purchase Option on Contract Terms and the Measurement of the Liability

The lease term is the period during which a lessee has a noncancelable right to use an underlying asset, plus periods covered by a lessee’s option to terminate the lease if it is reasonably certain, that the lessee will not exercise that option. If a lessee determines that a purchase option will be exercised, the option period is not included in the lease term; however, the exercise price of the purchase option is only included in the measurement of the liability when payment is reasonably certain. Statements 94 and 96 include similar provisions in determining the lease term but do specifically address purchase options. This project would address that difference. 

Derivative Instruments That Are Neither Hedges nor Investments

Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, categorizes all derivative instruments that are not effective hedges as investments. However, certain derivative instruments that are not effective hedges also do not meet the definition of an investment in Statement No. 72, Fair Value Measurement and Application. This project would consider whether a third category of derivative instruments should be established.

Exchange Financial Guarantees

Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, does not apply to financial guarantees made or received by governments in an exchange or exchange-like transaction. This project would consider establishing guidance specifically for exchange and exchange-like financial guarantees.

Other Technical Corrections

Current Codification language uses outdated balance sheet terminology and incorrectly refers to fund equity and other terms. This project would consider minor terminology and other technical corrections in order to make the Codification consistent with current guidance established in the original pronouncements, as amended.

Accounting and Financial Reporting Issues: The following issues will be considered:
  • Leases and related pronouncements:
    • Remeasurement of assets and liabilities solely for a change in an index or rate used to determine variable payments
    • Effect of a purchase option on contract terms and measurement of the liability
  • Classification of derivative instruments that are neither hedges nor investments
  • Recognition of exchange and exchange-like financial guarantees
  • Technical corrections to terminology in the Codification.
Project History:
  • Added to current technical agenda: August 2020
  • Consultative group appointed? No
  • Deliberations began: September 2020
Current Developments: An Exposure Draft of a proposed Statement was approved in July 2021. The comment period ends September 17, 2021. 

Work Plan:
 
Board meetings Topics to Be Considered
September 2021: Comment period continues.
November 2021: Redeliberate exchange and exchange-like financial guarantees and amendments to Statements 87, 94, and 96.
December 2021: Redeliberate derivative instruments that are neither investment derivative instruments nor hedging derivative instruments, and replacement of interbank offered rates.
January 2022: Redeliberate remaining topics. 
March 2022: Discuss preballot draft of a final Statement.
April 2022: Discuss ballot draft of a final Statement and consider for approval.
 

Omnibus—Recent Minutes


Minutes of Meetings, June 30–July 2, 2021
 
The Board deliberated on how to account for consideration received by a guarantor government in an exchange or exchange-like financial guarantee. The Board tentatively decided not to propose guidance in the Omnibus Exposure Draft.
 
The Board reviewed a ballot draft of an Exposure Draft of a proposed Statement, Omnibus 20XX, and discussed clarifying edits. The Board voted unanimously to approve the issuance of the Exposure Draft.

Minutes of Meetings, May 20–21, 2021
 
The Board continued deliberations on the Omnibus project with a discussion about disclosure requirements for exchange and exchange-like financial guarantees.
 
The Board first discussed whether disclosures for nonexchange financial guarantees in Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, should be required for exchange and exchange-like financial guarantees. The Board tentatively decided to propose that such disclosure requirements should be applied to exchange and exchange-like financial guarantees. The Board also discussed how those disclosure requirements should be applied. The Board tentatively decided to propose that cumulative amounts of indemnification payments related to exchange and exchange-like financial guarantees should be allowed to be disclosed on a prospective basis. The proposed disclosures would include the date through which the cumulative amounts were determined.
 
Following these deliberations, the Board discussed whether the proposed requirements to be included in the Exposure Draft of a proposed Statement, Omnibus 20XX, meet all of the characteristics of Group 1 information, and therefore, are within the scope of the GASB’s authority. The Board tentatively decided that the proposed requirements meet these characteristics, and therefore, are within the scope of the GASB’s authority. Next, the Board discussed whether the expected benefits of the proposed requirements in the Exposure Draft, Omnibus 20XX, will justify the perceived costs of implementation and ongoing compliance. The Board tentatively decided that the expected benefits will justify the perceived costs. The Board then discussed the appropriate comment period for feedback on the Exposure Draft, Omnibus 20XX. The Board tentatively decided that the comment period for feedback should be 60 days.
 
To close deliberations, the Board discussed a preballot draft of an Exposure Draft of a proposed Statement, Omnibus 20XX. The Board discussed recognition in exchange or exchange-like financial guarantees when consideration is received in advance of providing the guarantee protection. The Board tentatively decided to propose that a deferred inflow of resources should be recognized until the period in which the guarantee protection is provided. The Board also suggested other clarifying edits to the draft.
 
Finally, the Board agreed to move forward with a ballot draft of an Exposure Draft of a proposed Statement, Omnibus 20XX.

Minutes of Meetings, April 6–7, 2021
 
The Board continued deliberations on the Omnibus project with a discussion regarding the transition from LIBOR.
 
The Board first discussed whether a modification of paragraph 11b of Statement 
No. 93, Replacement of Interbank Offered Rates, should be proposed to clarify that if LIBOR is no longer calculated by the ICE Benchmark Administration using its current methodology, it will not be an appropriate benchmark rate. The Board tentatively decided to propose this modification.
 
Following those deliberations, the Board discussed a first draft of a Standards section of an Exposure Draft of a proposed Statement, noting a few necessary editorial changes throughout its review. The Board discussed whether recognition and measurement guidance should be proposed for exchange and exchange-like financial guarantees under the current financial resources measurement focus. The Board tentatively decided that guidance should be proposed. The Board also discussed whether recognition guidance should be proposed for exchange and exchange-like intra-entity financial guarantees involving blended component units. The Board tentatively decided that guidance also should be proposed.
 
Similarly, the Board discussed whether the disclosure requirements should be similar to those in Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees. The Board tentatively decided that those requirements should be proposed if procedures would allow such requirements without additional outreach.
 
The Board then discussed whether paragraph 61 of Statement No. 87, Leases, should be amended to clarify that lease incentives include an assumption of or agreement to pay a lessee’s preexisting lease obligations to a third party. The Board tentatively decided that those amendments should be made.
 
To close deliberations, the Board voted unanimously to proceed to a preballot draft of an Exposure Draft of a proposed Statement.

Minutes of Videoconferences, February 24–26, 2021

The Board continued deliberations on the Omnibus project with a discussion regarding the transition from provisions including the term LIBOR.

The Board first discussed whether paragraph 11b of Statement No. 93, Replacement of Interbank Offered Rates, should be proposed to be modified to reference the cessation of the ICE Benchmark Administration’s (IBA’s) publishing of LIBOR rates as the trigger for LIBOR no longer being an appropriate benchmark. The Board tentatively decided that paragraph 11b should be modified accordingly. The Board also directed the staff to monitor the status of LIBOR’s publishing and provide alerts to stakeholders when its cessation has occurred.
 
Next, the Board began deliberations about the guidance on public-private and public-public partnerships. The Board discussed whether Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, provisions for remeasurement by a transferor of a receivable for the underlying PPP asset should be proposed to be amended to include circumstances in which the PPP term changes, but only if such change is expected to significantly affect the amount of the receivable. The Board tentatively decided to propose amending those provisions.
 
Similarly, the Board discussed whether Statement 94 provisions should include the remeasurement by an operator of a deferred outflow of resources to reflect the remeasurement of the operator’s liability for the underlying PPP asset. The Board tentatively decided that those provisions should be proposed.
 
The Board concluded deliberations by discussing potential effective dates and transition provisions for the Omnibus standards. The Board started by discussing whether the proposed requirements amending Statement No. 87, Leases, Statement 94, and Statement No. 96, Subscription-Based Information Technology Arrangements, should be effective for reporting periods beginning after June 15, 2022. The Board also discussed whether the proposed requirements amending Statements No. 53, Accounting and Financial Reporting for Derivative Instruments, and No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, (only the provisions related to exchange or exchange-like financial guarantees) should be effective for reporting periods beginning after June 15, 2023. Finally, the Board discussed whether all other proposed requirements should be effective upon issuance of the final Omnibus Statement. The Board tentatively decided that all of those effective dates should be proposed.
 
The Board also discussed transition provisions related to the Omnibus standards. The Board tentatively decided that transition provisions should (1) require retroactive application by restating financial statements, if practicable, for all periods presented; (2) require the cumulative effect, if any, of applying the Statement to be reported as a restatement of beginning net position (or fund balance or fund net position, as applicable) for the earliest period restated if restatement for all prior periods is not practicable; (3) require the reason for not restating prior periods presented, if applicable, to be disclosed; and (4) require the nature of the restatement and its effect to be disclosed in the first period that the Statement is applied.

Minutes of Videoconferences, January 12–14, 2021

The Board continued deliberations on the Omnibus project with a discussion about the recognition of exchange or exchange-like financial guarantees.
 
The Board first discussed whether the guidance for recognition of exchange or exchange-like financial guarantees should be amended to be when a payment is more likely than not, which is the same threshold that is applied to nonexchange financial guarantees. The Board tentatively decided to propose that the recognition guidance be amended accordingly.  Next, the Board discussed whether the guidance for the measurement of exchange or exchange-like financial guarantees should be amended to be based on the discounted present value of the best estimate of expected payments or the discounted present value of the minimum value in a range when a range of estimated future outflows can be established in which no amount within that range appears to be a better estimate than any other amount in circumstances in which there is no best estimate, which is the same as that of nonexchange financial guarantees. The Board tentatively decided to propose that the measurement guidance be amended in that manner. Following that tentative decision, the Board discussed whether revenue recognition guidance should be proposed for exchange or exchange-like financial guarantees. The Board tentatively decided that such guidance should be proposed. To conclude the discussion on exchange or exchange-like financial guarantees, the Board discussed whether the revenue recognition guidance in relation to exchange or exchange-like financial guarantees should be similar to that of public entity risk pools and insurance entities. The Board tentatively decided to propose that the revenue recognition guidance be similar.
 
The Board continued by deliberating several potential Codification refinements. The Board first discussed whether Statement No. 34, Basic Financial Statements— and Management’s Discussion and Analysis—for State and Local Governments, infrastructure transition guidance associated with Phase 1 and 2 governments should be eliminated from the GASB Codification. The Board tentatively decided to propose that this guidance be eliminated from the Codification. Next, the Board discussed whether the Statement 34 infrastructure transition guidance associated with Phase 3 governments should be eliminated from the GASB Codification.  The Board tentatively decided not to remove the guidance completely from the Codification. The Board discussed moving this guidance from the Codification to Appendix D (Effective Dates of Pronouncements) of the Codification, which is designated for transition guidance. The Board tentatively decided to propose that this guidance be moved accordingly.
 
The Board also discussed whether the usage of the term fund equity in paragraph 485 and the footnote to paragraph 486 of Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, as amended, should be replaced. The Board tentatively decided to propose that this term be replaced. Similarly, the Board discussed whether the term basis of accounting used in paragraph 280 of Statement 62, as amended, should be changed to the term measurement attributes. The Board tentatively decided to propose that this term be changed.
 
The Board then discussed whether paragraph 20 of Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, should be amended to also reflect the accounting of a transaction between a primary government and its blended component unit. The Board tentatively decided to propose that this paragraph be amended accordingly, with a clarification that paragraph 20 refer to the component unit as a blended component unit.

Minutes of Videoconferences, December 1–3, 2020

The Board began deliberations of the Omnibus project by discussing lease provisions that allow for the termination of a lease due to the violation of lease terms and conditions. The Board discussed whether paragraph 12 of Statement No. 87, Leases, should be modified to clarify that violations of lease terms and conditions do not constitute termination options. Pursuant to that discussion, the Board tentatively decided to propose that the prescriptive guidance in the last sentence of paragraph 12 of Statement 87 be replaced with principles-based guidance. The Board also tentatively agreed to propose that the last sentences in paragraph 10 of Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, and paragraph 9 of Statement No. 96, Subscription-Based Information Technology Arrangements, be modified accordingly.
 
The Board continued deliberations with a discussion about the categorization of derivative instruments. Specifically, the Board discussed whether the two derivative instrument categories included in Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, as amended, sufficiently describe all derivative instruments. The Board tentatively decided to propose that the derivative instrument definitions or categories be modified to describe all derivative instruments. To accomplish this, the Board tentatively decided to propose that Statement 53 be amended to include a third category for noneffective hedging derivative instruments, defined as all derivative instruments that do not meet the definitions of hedging derivative instruments and investment derivative instruments.
 
Next, the Board discussed certain issues related to terminology used throughout GASB literature. The Board first discussed whether Statement No. 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance, should be amended to eliminate the food stamps guidance in paragraph 6, as amended, and related footnotes. The Board tentatively decided to propose eliminating that guidance.
 
Next, the Board discussed whether certain usages of the term balance sheet and the phrase as a whole throughout GASB literature should be removed. The Board tentatively decided to propose those changes.

Minutes of Videoconferences, October 20–22, 2020

The Board continued deliberations on the Omnibus project. The focus of this meeting was on potential technical corrections related to Statement No. 87, Leases. The Board began by discussing the effect of a purchase option that can be exercised during the lease term on the measurement of the lease liability. The Board tentatively decided to propose that a purchase option that can be exercised during the lease term be accounted for as a termination option if it is reasonably certain that the lessee will exercise the option. Pursuant to that tentative decision, the Board tentatively decided to propose that paragraph 12 be amended to remove as an exception to a termination option the purchase of the underlying asset and that paragraph 21e be amended to clarify that the purchase price of mid-term purchase options should be included in the measurement of the lease liability.

Next, the Board discussed the effect of cancellable periods on lease terms in short-term leases. The Board tentatively decided to propose amending paragraph 16 of Statement 87 to clarify that cancellable periods refer to periods for which both the lessee and the lessor have an option to terminate the lease without the permission of the other party.

The Board then considered the remeasurement of the lease term when modifications to a short-term lease occur. The Board tentatively decided to propose amending paragraph 16 of Statement 87 to clarify that a short-term lease that has been modified to extend the initial maximum possible term under the lease contract should be remeasured from the date of the inception of the lease. The Board tentatively decided to propose that if the remeasured term is greater than 12 months, the lease no longer be considered a short-term lease. The Board also tentatively decided to propose amending paragraph 13 of Statement No. 96, Subscription-Based Information Technology Arrangements, regarding the effect of modifications on the term of short-term subscription-based technology arrangements.

Next, the Board considered issues related to the inclusion or exclusion of certain variable payments in the measurement of the lease liability or receivable. The Board tentatively agreed to propose amending paragraphs 22 and 45 of Statement 87 to clarify that all variable payments other than those that depend on an index or a rate should be excluded from the measurement of the lease liability and receivable.

Finally, the Board discussed provisions related to the consideration of lease incentives in the measurement of the lease liability or receivable. The Board tentatively decided to propose amending paragraph 61 of Statement 87 to clarify that lease incentives include an agreement to pay a lessee’s preexisting lease obligations to a third party, rather than the assumption of that preexisting lease obligation.

Minutes of Videoconferences, September 8–10, 2020

The Board began deliberations by discussing an issue related to the remeasurement of certain assets and liabilities in Statements No. 87, Leases; No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements; and No. 96, Subscription-Based Information Technology Arrangements. Specifically, provisions in those standards could be viewed as not prohibiting governments from remeasuring assets and liabilities solely for a change in an index or a rate used to determine variable payments or a discount rate associated with the incremental borrowing rate, which could be viewed as allowing a fair-value option for these assets and liabilities. The Board tentatively decided to propose amendments to paragraphs 26, 28, and 50 of Statement 87; paragraphs 28, 45, and 47 of Statement 94; and paragraphs 21 and 23 of Statement 96 to clarify that certain assets and liabilities should not be remeasured solely for a change in an index or a rate used to determine variable payments or a discount rate associated with the incremental borrowing rate.

Omnibus—Tentative Board Decisions to Date


The Exposure Draft of a proposed Statement, Omnibus 20XX, was approved in July 2021.