During the final stages of production on Statement 39, an error occurred and the phrase “or its component units” was inadvertently dropped from paragraph 5 of the standard.

Rather than reprint the entire Statement, we believe a more cost-effective way to deal with the error is to ask those who have already received Statement 39 to insert the words by hand. The correct wording of paragraph 5 follows. The missing phrase is in criterion
40a(2) and is shown in boldface type.

5. Paragraph 40a is added between paragraphs 40 and 41 as follows:

40a. Certain organizations warrant inclusion as part of the financial reporting entity because of the nature and significance of their relationship with the primary government, including their ongoing financial support of the primary government or its other component units. A legally separate, tax-exempt organization should be reported as a component unit of a reporting entity if all of the following criteria are met:


1. The economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the primary government, its component units, or its constituents.
2. The primary government, or its component units, is entitled to, or has the ability to otherwise access,^a a majority of the economic resources received or held by the separate organization.
3. The economic resources received or held by an individual organization that the specific primary government, or its component units, is entitled to, or has the ability to otherwise access, are significant to that primary government.
   ______________
   ^{a[The footnote is correct as printed.]}

If you would prefer a peel-and-stick correction overlay, please call (800) 748-0659 and select option “4” (Customer Service) or send email to gasbpubs@gasb.org.

We apologize for any inconvenience this may cause you. All documents shipped after June 3, 2002 will contain the corrected wording.