Statement No. 38
Certain Financial Statement Note Disclosures
(Issued 6/01)

This Statement modifies, establishes, and rescinds certain financial statement disclosure requirements.

Existing disclosure requirements are modified to include the following:

• Descriptions of the activities accounted for in the major funds, internal service fund type, and fiduciary fund types
• The length of time used to define available for purposes of revenue recognition in the governmental fund financial statements
• Actions taken to address significant violations of finance-related legal or contractual provisions
• Debt service requirements to maturity, separately identifying principal and interest for each of the subsequent five years and in five-year increments thereafter
• Obligations under leases for each of the five subsequent years and in five-year increments thereafter
• A schedule of changes in short-term debt and the purpose for which short-term debt was issued
• For interfund balances, amounts due from other funds by individual major fund, nonmajor governmental funds in the aggregate, nonmajor enterprise funds in the aggregate, internal service funds in the aggregate, and fiduciary fund type; the purpose for those balances; and amounts that are not expected to be repaid within one year.

Governments should provide the following additional note disclosures:

• Interest requirements for variable-rate debt computed using the rate effective at year-end
• Terms of interest rate changes for variable-rate debt
• Details about major components of receivable and payable balances when obscured by aggregation and identification of receivable balances not expected to be collected within one year
• For interfund transfers, amounts transferred from other funds by individual major fund, nonmajor governmental funds in the aggregate, nonmajor enterprise funds in the aggregate, internal service funds in the aggregate, and fiduciary fund type; a general description of the principal purposes of interfund transfers; and purposes for and amounts of certain transfers.

This Statement rescinds the requirement in National Council of Governmental Accounting Statement 1, Governmental Accounting and Financial Reporting Principles, to disclose the accounting policy for encumbrances.

The provisions of this Statement are generally effective when the provisions of GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, are required to be implemented, except that requirements related to short-term debt, receivable and payable balances, interfund balances, and interfund transfers may be implemented one year later by phase 1 governments. Earlier application is encouraged.

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Unless otherwise specified, pronouncements of the GASB apply to financial reports of all state and local governmental entities, including general purpose governments, public benefit corporations and authorities, public employee retirement systems, and public utilities, hospitals and other healthcare providers, and colleges and universities. Paragraph 2 discusses the applicability of this Statement.