GASB Emergency Toolbox

Operating under today’s difficult circumstances may raise accounting and financial reporting issues that are not commonly dealt with by governments and their auditors. Other issues that may be encountered more often, such as subsequent events, could become more common or of greater magnitude than usual.
 
The purpose of this “toolbox” is to help stakeholders quickly identify the GASB’s authoritative guidance that could be relevant to the current circumstances. Toolbox links have been provided to identify additional professional organizations from which stakeholders may obtain nonauthoritative recommendations for financial reporting and other activities as government’s deal with the effects of the pandemic.

Revised: July 20, 2020

During the due process associated with and deliberations leading to the issuance of Technical Bulletin 2020-1, Accounting and Financial Reporting Issues Related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) and Coronavirus Diseases, several issues were raised that were not specifically addressed in the Technical Bulletin, but for which current authoritative standards provide guidance.

To assist stakeholders, the following issues have been added to the Emergency Toolbox:
  • Disclosures related to outflows of resources incurred in response to COVID-19
  • Donated inventory
  • Nonexchange financial guarantee disclosures
  • Subsequent contravention of eligibility requirements
  • Classification of transactions not specifically addressed in Category A or Category B authoritative literature as either operating or nonoperating revenues and expenses
  • Extension of property tax due dates
  • Subsequent events disclosures for legislation enacted after the end of the reporting period.

GASB Guidance

 
The following are topics in the generally accepted accounting principles for state and local governments that may be of particular relevance to governments at this time. The references are to the GASB’s Codification of Governmental Accounting and Financial Reporting Standards, as of December 31, 2019, which can be accessed free of charge through the Governmental Accounting Research System™ (GARS) at https://gars.gasb.org/.
 
Issue
Relevance
Codification Section
Capital asset impairment Discontinued operations (other than temporary); idle impaired capital assets 1400—Reporting Capital Assets, paragraphs .176–.180
Contingencies Risk-financing and insurance-related activities other than public entity risk pools C50—Claims and Judgments, paragraphs .109–.148
Contingent liabilities, including exchange financial guarantees and contingent assets C50—Claims and Judgments, paragraphs .149–.168
Debt extinguishments All extinguishments of debt, including refundings D20—Debt Extinguishments and Troubled Debt Restructuring, paragraphs .103–.128
Demand bonds Remarketing demand bonds, and counterparty take-out agreement D30—Demand Bonds, Paragraphs .107–.112
Derivative instruments Termination of hedge accounting, including circumstances in which a swap counterparty or its credit support provider commits or experiences an act of default or a termination event D40—Derivative Instruments, paragraphs .118–.121
Disclosures related to outflows of resources
NEW 07-20-20		 Outflows of resources incurred in response to COVID-19 2300—Notes to Financial Statements, paragraph.108
Disposals of operations Cessations of operations, such as through transfer or sale Co10—Combinations and Disposals of Operations, paragraphs .148–.152 and .155
Donated inventory
NEW 07-20-20		 Donated personal protection equipment N50—Nonexchange Transactions, paragraph .103
Extraordinary and special items Revenues and expenses (expenditures) that are unusual and/or infrequent 1800—Classification and Terminology, paragraphs .144–.152
Fair value measurement Transactions that are no longer orderly due to a significant decline in market activity 3100—Fair Value Measurement, paragraphs .142–.148
Going concern considerations Information that contradicts the presumption that a government is a going concern 2250—Additional Financial Reporting Considerations, paragraphs .117–.120
Government combinations Mergers between governments, a government acquiring another entity, and transfers of operations Co10—Combinations and Disposals of Operations, paragraphs .102–.147 and .152–.154
Management’s discussion and analysis Required discussion of currently known facts, decisions, or conditions expected to have a significant effect on financial position or results of operations 2200—Comprehensive Annual Financial Report, paragraphs .108 and .109h
Nonexchange financial guarantees
REVISED 07-20-20		 Guarantor recognition and disclosure requirements if a government is more likely than not to make a payment;
disclosures for governments with outstanding obligations (for example, PPP loans) that have been guaranteed by another entity as part of a nonexchange transaction		 N30—Nonexchange Financial Guarantees, paragraphs .105–.108 and .111–.113
Nonexchange transactions
NEW 07-20-20		 Subsequent contravention of eligibility requirements N50—Nonexchange Transactions, paragraph .123
Operating and nonoperating revenue and expenses
NEW 07-20-20		 Classification of transactions not specifically addressed in Category A or Category B authoritative literature 1000—The Hierarchy of Generally Accepted Accounting Principles, paragraphs .103, and 2200—Comprehensive Annual Financial Report, paragraphs .191-.193.
Prior-period adjustments and accounting changes Changes in an accounting principle, accounting estimate, or the reporting entity 2250—Additional Financial Reporting Considerations, paragraphs .121–.150
Property tax revenues
NEW 07-20-20		 One-time extension of property tax due date P70—Property Taxes, paragraph .104. and N50—Nonexchange Transactions, paragraph .115
Public entity risk pools Risk-financing and insurance-related activities Po20—Public Entity Risk Pools, paragraphs .119–.124, .130–.132, and 146–.147
Revenue and expense/expenditure recognition Certain actions that provide budgetary relief—such as delaying payments on expenses (expenditures) already incurred or accelerating the receipt of future-period revenues—do not result in a comparable change to accrual-based and modified-accrual based inflows and outflows Revenue recognition:

1600—Basis of Accounting, paragraphs .103–.106 and .113–.115

N50—Nonexchange Transactions, paragraphs .113–.127

P70—Property Taxes, paragraphs .105–.107

S20—Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, paragraphs .102–.119

Expenditure recognition:

1600—Basis of Accounting, paragraphs .103 and .116–.125

N50—Nonexchange Transactions, paragraphs .116–.125

Budgetary reporting:

2400—Budgetary Reporting, paragraphs .102, .103, .110, and .111  
Revenue and receivable recognition Estimations of uncollectible amounts 1600—Basis of Accounting, paragraphs .104 and .106

L30—Lending Activities, paragraph .121

N50—Nonexchange Transactions, paragraphs .113, .115, .118, and .123

P70—Property Taxes, paragraph .106
Sales and pledges of receivables and future revenues Transactions in which a government sells receivables or pledges a future revenue stream to repay a borrowing S20—Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, paragraphs .102–.119
Significant violations of finance-related legal or contractual provisions Violations, such as a bond covenant violation, and how those violations are being addressed 1200—Generally Accepted Accounting Principles and Legal Compliance, paragraph .112

2300—Notes to Financial Statements, paragraph .106h
Subsequent events
REVISED 07-20-20		 Events or transactions that affect the financial statements but occur after the financial statement date; disclosures for legislation enacted after the end of the reporting period 2250—Additional Financial Reporting Considerations, paragraphs .109–.116
Termination benefits Early retirement offers and similar programs T25—Termination Benefits
Troubled debt restructuring Restructuring of debt for governments both as debtor and creditor D20—Debt Extinguishments and Troubled Debt Restructuring, paragraphs .129–.165
 

Professional Organizations

 
The following are professional organizations from the governmental sphere who are offering advice on how to proceed with financial management activities, including accounting and financial reporting, during the pandemic.
 
NOTE: The GASB establishes guidance only after extensive due process.  Therefore, the provision of these links should not be viewed as an endorsement of any kind.  
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