NEWS RELEASE 03/16/12
GASB Proposal Addresses Government Combinations and Disposals of Government OperationsNorwalk, CT, March 16, 2012—The Governmental Accounting Standards Board (GASB) today issued for public comment a proposed Statement that would provide U.S. state and local governments with standards for financial reporting regarding government combinations (mergers, acquisitions, and transfers of operations) and disposals (sales and transfers) of government operations. The GASB is seeking public comment on its proposals, which are contained in its Exposure Draft, Government Combinations and Disposals of Government Operations.
The proposed Statement is intended to improve accounting and financial reporting by providing standards for combinations in the governmental environment. Specifically, it would require state and local governments to:
- Identify whether a government combination is a government merger, government acquisition, or a transfer of operations
- Use carrying values to measure the assets and liabilities combined in a government merger or transfer of operations
- Measure acquired assets and liabilities based upon their acquisition values in a government acquisition, and
- Provide guidance for government operations that have been transferred or sold.
“Until now, state and local governments have accounted for mergers and acquisitions by referring to accounting and financial reporting guidance intended for the business environment,” said Robert Attmore, GASB chairman. “Based on our research and feedback from stakeholders, the GASB decided to propose new guidance tailored to governmental situations and circumstances, to enable financial statement users, preparers, and auditors to evaluate the specific nature and financial effects of those transactions.”
The amendments in this proposal would be effective for periods beginning after December 15, 2013, and would be applied on a prospective basis. Early application of the standards would be encouraged.
The Exposure Draft is open for comment until June 15, 2012, and is available for review and download at www.gasb.org.
Comments should be addressed to the Director of Research and Technical Activities, Project No. 3-17 and emailed to firstname.lastname@example.org or mailed to the following address:
Governmental Accounting Standards Board
401 Merritt 7
PO Box 5116
Norwalk, CT 06856
About the Governmental Accounting Standards Board
The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board’s diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its website, www.gasb.org.