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June 30, 2020
Comments Due: February 26, 2021
Proposed Statement
of the Governmental Accounting Standards Board 
Financial Reporting Model Improvements
This Exposure Draft of a proposed Statement of Governmental Accounting Standards is issued by the Board for public comment. Written comments should be addressed to:
Director of Research and Technical Activities
Project No. 3-25
FINANCIAL REPORTING MODEL IMPROVEMENTS
Notice of Public Hearings and User Forums, and Request for Written Comments
PUBLIC HEARINGS AND USER FORUMS
Public hearings are tentatively scheduled as follows:
  • March 23, 2021, in Boise, ID (in conjunction with the annual conference of the National Association of State Comptrollers), beginning at 8:30 a.m. local time.
  • March 30–31, 2021, in Atlanta, GA, beginning at 8:30 a.m. local time.
  • April 8, 2021, in New York, NY, beginning at 8:30 a.m. local time.
  • April 13–14, 2021, in Chicago, IL, beginning at 8:30 a.m. local time.
  • April 20–21, 2021, in San Francisco, CA, beginning at 8:30 a.m. local time.
User forums are tentatively scheduled as follows:
  • April 9, 2021, in New York, NY, beginning at 8:30 a.m. local time.
  • April 15, 2021, in Chicago, IL, beginning at 8:30 a.m. local time.
Public hearings. The public hearings are being conducted in conjunction with the public hearings on the Exposure Draft of a proposed Concepts Statement, Recognition of Elements of Financial Statements (Recognition Concepts Exposure Draft). Public hearings on the Preliminary Views, Revenue and Expense Recognition, also will be conducted on the same days to allow interested individuals or organizations to participate in both public hearings. Because there is a degree of interaction between the documents, respondents may wish to consider reviewing all documents before developing responses. Those individuals or organizations may participate in person, by videoconference (if available at the location), or by telephone. Details regarding participation will be provided after the Governmental Accounting Standards Board (GASB) receives a notice of intent to participate.
User forums. The user forums are being conducted primarily for interested individuals or organizations from the financial statement user community. Interested individuals or organizations may participate in person, by videoconference (if available at the location), or by telephone. Participation in person is encouraged. Details regarding participation will be provided after the GASB receives a notice of intent to participate.
Deadline for written notice of intent to participate in the public hearings and user forums: February 26, 2021.
Basis for public hearings and user forums. The GASB has scheduled the public hearings and user forums to obtain information from interested individuals and organizations about the issues discussed in this Exposure Draft and in the Recognition Concepts Exposure Draft. The hearings and forums will be conducted by one or more members of the GASB and its staff. Interested parties are encouraged to participate at a hearing or forum and through written response.
Public hearing oral presentation requirements. Individuals or organizations that want to make an oral presentation in person, by videoconference (if available at the location), or by telephone at a public hearing are required to provide, by the deadline for notice of intent to participate (February 26, 2021), a written notification of that intent, accompanied by their written submission in response to this Exposure Draft. A copy of additional comments that will be made at the public hearing addressing the issues discussed in this Exposure Draft should be provided two weeks before the hearing. The notification, written submission, and additional comments should be addressed to the Director of Research and Technical Activities, Project No. 3-25, and emailed to director@gasb.org. The notification should indicate the location of the hearing at which the respondent would like to participate and a preference for participating in person, by videoconference (if available at the location), or by telephone. A public hearing may be cancelled if sufficient interest is not expressed by the deadline.
The GASB intends to schedule all respondents who want to make oral presentations at a public hearing and will notify each individual or organization of the expected time of their presentation. The presentation may address issues discussed in this Exposure Draft, the Recognition Concepts Exposure Draft, or both documents. The time allotted to each individual or organization will be limited to approximately 30 minutes for each document— 10 minutes to summarize or elaborate on the written submissions, or to comment on the written submissions or presentations of others, and 20 minutes to respond to questions from those conducting the hearing.
User forum participation requirements. Participation in a user forum is limited to external financial statement users, such as municipal bond analysts, taxpayer group members, and legislators. All participants are asked to engage in a discussion of the issues raised in this Exposure Draft, additional issues raised by the Board members and staff, and issues raised by other participants. Every participant will be provided with the opportunity to express his or her views.
Individuals who want to participate in a user forum should provide, by the deadline for notice of intent to participate (February 26, 2021), a written notification of that intent (addressed to the Director of Research and Technical Activities, Project No. 3-25, and emailed to director@gasb.org). The notification should indicate the location of the user forum at which the respondent would like to participate and a preference for participating in person, by videoconference (if available at the location), or by telephone. Participation in person is encouraged.
Observers. Observers are welcome at the public hearings and user forums and are urged to submit written comments.
WRITTEN COMMENTS
Deadline for submitting written comments: February 26, 2021.
Requirements for written comments: Any individual or organization that wants to provide written comments should provide those comments by February 26, 2021. Comments should be addressed to the Director of Research and Technical Activities, Project No. 3-25, and emailed to director@gasb.org.
OTHER INFORMATION
Public files. Written comments and transcripts of the public hearings will become part of the GASB’s public file. Written comments also are posted on the GASB’s website.
This Exposure Draft may be downloaded from the GASB’s website at www.gasb.org.
Final GASB publications may be ordered at www.gasb.org.
____________________
Copyright © 2020 by Financial Accounting Foundation. All rights reserved. Permission is granted to make copies of this work provided that such copies are for personal or intraorganizational use only and are not sold or disseminated and provided further that each copy bears the following credit line: “Copyright © 2020 by Financial Accounting Foundation. All rights reserved. Used by permission.”
Notice to Recipients of This Exposure Draft
The GASB is responsible for (1) establishing and improving standards of state and local governmental accounting and financial reporting to provide useful information to users of financial reports and (2) educating stakeholders—including issuers, auditors, and users of those financial reports—on how to most effectively understand and implement those standards.
The due process procedures that we follow before issuing our standards, concepts, and other communications are designed to encourage broad public participation. As part of that due process, the GASB is issuing this Exposure Draft setting forth a proposed Statement on financial reporting model improvements.
We invite your comments on all matters in this proposed Statement. Because this proposed Statement may be modified before it is issued as a final Statement, it is important that you comment on any aspects with which you agree as well as any with which you disagree. To facilitate our analysis of comment letters, it would be helpful if you explain the reasons for your views, including alternatives that you believe the GASB should consider.
All responses are distributed to all Board members and to staff members assigned to this project, and all comments are considered during the Board’s deliberations leading to a final Statement. Only after the Board is satisfied that all alternatives have adequately been considered, and modifications have been made as considered appropriate, will a vote be taken to issue a final Statement. A majority vote of the Board is required for adoption.
Summary
The objective of this proposed Statement is to improve key components of the financial reporting model. Those changes would (1) improve the effectiveness of the financial reporting model in providing information that is essential for decision making and assessing a government’s accountability and (2) address certain application issues.
Management’s Discussion and Analysis
This proposed Statement would continue the requirement that the basic financial statements be preceded by management’s discussion and analysis (MD&A), which is presented as required supplementary information (RSI). This proposed Statement would require that the information presented in MD&A be limited to the related topics discussed in five sections: (1) Introduction, (2) Financial Summary, (3) Detailed Analyses, (4) Significant Capital Asset and Long-Term Debt Activity, and (5) Currently Known Facts, Decisions, or Conditions. This proposed Statement would continue the requirement that MD&A provide an objective and easily readable analysis of the government’s financial activities based on currently known facts, decisions, or conditions, and present comparisons between the current year and prior year, with a focus on the current year, in order to assist users with understanding why balances and results changed. This proposed Statement also would emphasize that the analysis provided in MD&A should avoid any unnecessary duplication by not repeating explanations that may be relevant to multiple sections and that “boilerplate” discussions should be avoided by presenting only the most relevant information, focused on the primary government. Finally, this proposed Statement would continue the requirement that information included in MD&A distinguish between that of the primary government and its discretely presented component units.
Unusual or Infrequent Items
This proposed Statement would describe unusual or infrequent items as transactions and other events that are either unusual in nature or infrequent in occurrence. Furthermore, governments would be required to display unusual or infrequent items as the last presented flow of resources prior to the net change in resource flows in the government-wide, governmental fund, and proprietary fund statements of resource flows.
Application of the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting in Governmental Funds
This proposed Statement would require financial statements for governmental funds to be presented applying the short-term financial resources measurement focus and accrual basis of accounting. This measurement focus and basis of accounting would report elements of financial statements from a short-term perspective that is uniform across governments.
Recognition using the short-term financial resources measurement focus and accrual basis of accounting would be based on whether items arise from short-term or long-term transactions and other events. Balances, inflows of resources, and outflows of resources from short-term transactions and other events would be recognized as the underlying transaction or other event occurs. Balances, inflows of resources, and outflows of resources from long-term transactions and other events would be recognized when payments are due, with the exception that any item associated with long-term debt issued for short-term purposes would be recognized as a short-term transaction. Interfund balances and transfers would be recognized as short-term events.
Presentation of Governmental Fund Financial Statements
This proposed Statement would require that the short-term financial resource flows statement for governmental funds be presented using the current and noncurrent activity format. That format would report inflows of resources and outflows of resources related to the purchase and disposal of capital assets and the issuance and payment of long-term debt separately from other activities in governmental funds.
This proposed Statement also would require that the governmental fund balance sheet be titled “Short-Term Financial Resources Balance Sheet” and the governmental fund resource flows statement be titled “Statement of Short-Term Financial Resource Flows.” The captions used in the governmental fund financial statements would be assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balances, inflows of resources from current activities, outflows of resources from current activities, and net flows from noncurrent activities.
Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position
This proposed Statement would require that the proprietary fund statement of revenues, expenses, and changes in fund net position continue to distinguish between operating and nonoperating revenues and expenses. Operating revenues and expenses would be defined as revenues and expenses other than nonoperating revenues and expenses. Nonoperating revenues and expenses would include (1) subsidies received and provided, (2) revenues and expenses related to financing, (3) resources from the disposal of capital assets and inventory, and (4) investment income and expenses.
In addition to the subtotals currently required in a proprietary fund statement of revenues, expenses, and changes in fund net position, this proposed Statement would require that a subtotal for operating income (loss) and noncapital subsidies be presented before reporting other nonoperating revenues and expenses. Subsidies would be defined as (1) resources received from another party or fund to keep the rates lower than otherwise would be necessary to support the level of goods and services to be provided and (2) resources provided to another party or fund that results in higher rates than otherwise would be established for the level of goods and services to be provided.
Budgetary Comparison Information
This proposed Statement would require governments to present budgetary comparison information using a single method of communication—RSI. Governments also would be required to present (1) variances between final budget and actual amounts and (2) variances between original and final budget amounts. An analysis of significant variances would be required to be presented in notes to RSI rather than in MD&A.
Effective Date
The requirements of this proposed Statement would be effective based on a government’s total annual revenues in the first fiscal year beginning after June 15, 2022. Governments with total annual revenues of $75 million or more would be required to apply the requirements of this proposed Statement for fiscal years beginning after June 15, 2024. Governments with total annual revenues of less than $75 million would be required to apply the requirements of this proposed Statement for fiscal years beginning after June 15, 2025. Earlier application would be encouraged.
How the Changes in This Proposed Statement Would Improve Financial Reporting
The proposed short-term financial resources measurement focus and accrual basis of accounting would result in information provided by governmental fund financial statements that is more comparable across governments. Governments would recognize transactions on a conceptually consistent basis and over a uniform recognition period. The proposed requirements for the presentation of governmental fund financial statements would make the short-term nature of their information more evident and understandable and would more clearly differentiate them from the perspective presented by the government-wide financial statements. Financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting would reflect the amount of fund balance at period-end that is available for spending in the next period using a standardized approach, which may or may not be restricted for specific purposes, as well as fund balance that is legally or contractually required to be maintained intact. The proposed requirements for MD&A would improve the quality of the analysis of changes from the prior year, which would enhance the relevance of that information. They also would provide clarity regarding which information should be presented in MD&A. The proposed requirements for the separate presentation of unusual or infrequent items would provide clarity regarding which items should be reported separately from other inflows and outflows of resources.
The proposed definition of operating revenues and expenses and description of nonoperating revenues and expenses would replace accounting policies that vary from government to government, thereby improving comparability. The proposed addition of a subtotal for operating income (loss) and noncapital subsidies would improve the relevance of information provided in that statement.
The proposed requirement that budgetary comparison information be presented as RSI would improve comparability, and the inclusion of the specified variances and variance analyses would provide more useful information for making decisions and assessing accountability.
How the Board Considered Costs and Benefits in the Development of This Proposed Statement
One of the principles guiding the Board’s setting of standards for accounting and financial reporting is the assessment of expected benefits and perceived costs. The Board strives to determine that its standards address significant user needs and that the costs incurred through the application of its standards, compared with possible alternatives, are justified when compared to the expected overall public benefit. The Board believes that the expected benefits that would result from the implementation of this proposed Statement—more comparable, consistent, relevant, reliable, and understandable information—are significant and justify the perceived costs of implementation and ongoing compliance.
The proposed effective date provisions would allow governments with total annual revenues of less than $75 million to implement one year later than governments with total annual revenues of $75 million or more, thereby enabling the former to reduce implementation challenges by benefitting from the implementation experiences of the latter. In addition, certain decisions made by the Board are intended to mitigate the costs associated with the proposed Statement by not requiring additional information that some stakeholders requested. For example, this proposed Statement would not require presentation of a schedule of government-wide expenses by natural classification, nor does it include additional requirements for either the presentation or disclosure of debt service fund information or for the presentation of either a government-wide or a governmental funds statement of cash flows.
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 proposed Statement.

INTRODUCTION

1. The objective of this Statement is to improve key components of the financial reporting model. The purposes of the improvements are (a) to enhance the effectiveness of the financial reporting model in providing information that is essential for decision making and assessing a government’s accountability and (b) to address certain application issues identified through pre-agenda research conducted by the Governmental Accounting Standards Board (GASB).

STANDARDS OF GOVERNMENTAL ACCOUNTING AND FINANCIAL REPORTING

Scope and Applicability of This Statement
2. This Statement establishes or modifies existing accounting and financial reporting requirements related to the following:
  1. Management’s discussion and analysis
  2. Unusual or infrequent items
  3. Presentation of governmental fund financial statements
  4. Application of the short-term financial resources measurement focus and accrual basis of accounting in governmental funds
  5. Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position
  6. Information about major component units in basic financial statements
  7. Budgetary comparison information
  8. Financial trends information.
The requirements of this Statement apply to the financial statements of all state and local governments.
3. This Statement supersedes National Council on Governmental Accounting (NCGA) Statement 1, Governmental Accounting and Financial Reporting Principles, paragraphs 44, 61–63, 66, 67, 69, 70, 72, 73, 115, and 119; NCGA Statement 4, Accounting and Financial Reporting Principles for Claims and Judgments and Compensated Absences, paragraphs 16 and 17; Statement No. 1, Authoritative Status of NCGA Pronouncements and AICPA Industry Audit Guide, paragraph 10; Statement No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, footnote 3; Statement No. 18, Accounting for Municipal Solid Waste Landfill Closure and Postclosure Care Costs, paragraph 11; Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, paragraph 30 and footnote 16; Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, paragraphs 8–11, 55, 56, 78, 79, 101, 102, and 127, and footnotes 6–8, 42, 52, 53, and 56; Statement No. 37, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments: Omnibus, paragraphs 4 and 5; Statement No. 38, Certain Financial Statement Note Disclosures, paragraph 7; Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, footnote 2; Statement No. 65, Items Previously Reported as Assets and Liabilities, paragraph 30; NCGA Interpretation 3, Revenue Recognition—Property Taxes, paragraph 8; Interpretation No. 4, Accounting and Financial Reporting for Capitalization Contributions to Public Entity Risk Pools, footnote 5; Interpretation No. 5, Property Tax Revenue Recognition in Governmental Funds; the remaining requirements of Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements; Implementation Guide No. 2015-1, Questions 2.21.2, 4.28.16, 4.28.21–4.28.23, 4.28.25, 7.5.8, 7.5.11, 7.8.6, 7.43.2, 7.43.4, 7.72.6, 7.73.1, 7.73.4, 7.91.7, 7.91.8, 7.91.12, 9.8.1, Z.16.2, Z.54.2, Z.54.4, Z.54.18, Z.54.34, Z.54.45, Z.54.46, and Z.54.48; Implementation Guide No. 2019-1, Implementation Guidance Update—2019, Questions 4.11 and 4.14; the remaining requirements of Industry Audit Guide, Audits of State and Local Governmental Units (1974); and 2002 AICPA State and Local Governments Audit and Accounting Guide, paragraphs 11.16 and 14.56, and footnote 19. This Statement amends NCGA Statement 1, paragraphs 2–7, 10, 16, 18, 21, 28, 30, 32, 43, 57–59, 65, 78, 81, 85–87, 89–91, 93, 97, 99, 100, 108–114, 116, 125, 131, 133, 135, 139, 143, 147, 155, and 174; Statement No. 3, Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements, paragraphs 81 and 82; Statement No. 6, Accounting and Financial Reporting for Special Assessments, paragraphs 4, 13–15, 19, and 22; Statement No. 7, Advance Refundings Resulting in Defeasance of Debt, paragraph 8; Statement 10, paragraphs 52, 53, 56, 64, and 67–77; Statement No. 14, The Financial Reporting Entity, paragraphs 31, 38, 51, 54, 74, 80, and 131; Statement No. 16, Accounting for Compensated Absences, paragraph 13; Statement No. 17, Measurement Focus and Basis of Accounting—Governmental Fund Operating Statements: Amendment of the Effective Dates of GASB Statement No. 11 and Related Statements, paragraph 6; Statement 18, paragraphs 10, 14, and 15, and footnote 2; Statement No. 21, Accounting for Escheat Property, paragraph 5; Statement No. 24, Accounting and Financial Reporting for Certain Grants and Other Financial Assistance, paragraphs 5, 6, 8, 11, and 13; Statement No. 28, Accounting and Financial Reporting for Securities Lending Transactions, paragraphs 6 and 8; Statement No. 30, Risk Financing Omnibus, paragraphs 9 and 10; Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, paragraphs 13, 17, and 18, and footnote 8; Statement 33, paragraphs 11, 12, 27, and 29; Statement 34, paragraphs 6, 12, 16, 25, 38, 41, 50, 53, 54, 63, 64, 66, 76, 80, 82, 83, 85–90, 92, 100, 103, 107, 112, 121–123, 126, 128–131, 135, 136, 138, 139, 143, and 160, and footnotes 37 and 55; Statement No. 36, Recipient Reporting for Certain Shared Nonexchange Revenues, paragraph 2; Statement 37, paragraphs 3, 10, and 19; Statement 38, paragraph 13; Statement No. 41, Budgetary Comparison Schedules—Perspective Differences, paragraph 3; Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, paragraphs 17 and 21; Statement No. 44, Economic Condition Reporting: The Statistical Section, paragraphs 4, 10, and 12, and footnote 5; Statement No. 47, Accounting for Termination Benefits, paragraphs 12, 13, and 16; Statement No. 48, Sales and Pledges of Receivables and Future Revenues and Intra-Entity Transfers of Assets and Future Revenues, paragraphs 11–18, 20, and 21; Statement No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations, paragraphs 23, 24, and 28; Statement No. 51, Accounting and Financial Reporting for Intangible Assets, paragraph 19; Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, paragraphs 5 and 66, and footnote 6; Statement 54, paragraphs 6, 11, 15–23, 25, 28, and 30–34, and footnote 1; Statement No. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards, paragraphs 15, 17, and 19, and footnote 3; Statement No. 58, Accounting and Financial Reporting for Chapter 9 Bankruptcies, paragraphs 12–14; Statement No. 61, The Financial Reporting Entity: Omnibus, paragraphs 6, 7, and 9; Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, paragraphs 34, 45, 46, 49, 50, 55, 101, 209, 380, and 498, and footnotes 23, 28, 37, and 42; Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, paragraph 13; Statement 65, paragraphs 12 and 13, and footnote 5; Statement No. 67, Financial Reporting for Pension Plans, paragraphs 14 and 30; Statement No. 68, Accounting and Financial Reporting for Pensions, paragraphs 17, 36, 37, 43, 73, 74, 79, 91, 96, 107, 112, 119, 120, 121, 123, 124, 127–130, and 135, and footnote 2; Statement No. 69, Government Combinations and Disposals of Government Operations, paragraphs 40, 42, 43, 45, 47, 50, 51, 54, and 58; Statement No. 70, Accounting and Financial Reporting for Nonexchange Financial Guarantees, paragraphs 9–11; Statement No. 72, Fair Value Measurement and Application, footnote 2; Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68, paragraphs 37, 38, 60, 61, 77, 88, 98–103, 106–109, and 114; Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, paragraphs 34 and 70; Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions, paragraphs 15, 21, 30, 46, 47, 54, 73, 88, 89, 95, 108, 115, 126, 132, 139–141, 143, 161, 162, 184, 185, 202, 212, 223, 227–231, 234–237, and 242, and footnote 2; Statement No. 77, Tax Abatement Disclosures, paragraphs 7 and 8; Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans, paragraphs 6 and 7; Statement No. 81, Irrevocable Split-Interest Agreements, paragraphs 5, 15, 20, 23, 28, and 30–34; State- ment No. 83, Certain Asset Retirement Obligations, paragraph 24 and footnote 2; Statement No. 84, Fiduciary Activities, footnotes 1 and 4; Statement No. 85, Omnibus 2017, paragraphs 9–11, 21, and 22; Statement No. 86, Certain Debt Extinguishment Issues, paragraphs 5 and 6; Statement No. 87, Leases, paragraphs 10, 36, 56, and 83; Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, paragraphs 4 and 5; Statement No. 90, Majority Equity Interests, paragraph 8; Statement No. 91, Conduit Debt Obligations, paragraphs 12, 14, 16, and 17; Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, paragraphs 34 and 56; Statement No. 96, Subscription-Based Information Technology Arrangements, paragraph 59; NCGA Interpretation 3, paragraphs 3, 6, and 7; NCGA Interpretation 9, Certain Fund Classifications and Balance Sheet Accounts, paragraph 12; NCGA Interpretation 10, State and Local Government Budgetary Reporting, paragraphs 7, 11, 13, 14, 16, 19, 20, and 22; Interpretation No. 1, Demand Bonds Issued by State and Local Governmental Entities, paragraph 13; Interpretation 4, paragraphs 4 and 7; Technical Bulletin No. 2004-1, Tobacco Settlement Recognition and Financial Reporting Entity Issues, paragraph 15; Technical Bulletin No. 2004-2, Recognition of Pension and Other Postemployment Benefit Expenditures/Expense and Liabilities by Cost-Sharing Employers, paragraphs 1, 5, 7, 8, and 9; Technical Bulletin No. 2006-1, Accounting and Financial Reporting by Employers and OPEB Plans for Payments from the Federal Government Pursuant to the Retiree Drug Subsidy Provisions of Medicare Part D, paragraphs 3 and 7; Implementation Guide 2015-1, Questions 1.4.3, 1.66.8, 2.18.2, 2.20.5, 2.21.4, 3.4.1, 3.7.1, 3.27.5, 3.37.2, 3.49.1, 3.49.3, 3.49.4, 3.54.1, 3.56.2, 3.58.1, 3.65.2, 3.68.1, 3.72.2, 4.28.4, 4.28.9, 4.28.20, 4.30.3, 4.30.5, 4.30.6, 4.33.3, 4.36.1, 4.38.4, 4.57.1, 4.57.2, 5.64.3, 5.70.8, 5.116.3, 5.143.1, 5.145.1, 5.145.2, 5.165.2, 5.169.1, 5.185.1, 5.185.2, 5.204.1, 5.223.1, 5.224.1, 5.224.2, 5.242.1, 6.20.3, 6.24.1, 6.28.2, 6.28.6, 6.31.1, 6.31.3, 7.4.2, 7.4.4, 7.5.1–7.5.3, 7.5.6, 7.5.7, 7.5.9, 7.5.10, 7.5.12–7.5.14, 7.7.5, 7.8.4, 7.20.8, 7.20.10, 7.22.2, 7.23.2, 7.24.6, 7.26.1, 7.28.1, 7.28.5, 7.29.5, 7.33.4, 7.39.4, 7.42.1, 7.45.1, 7.47.4, 7.47.5, 7.47.11, 7.47.22, 7.49.1, 7.52.2, 7.52.5–7.52.8, 7.55.3, 7.56.1, 7.56.3, 7.56.5–7.56.10, 7.56.13, 7.56.14, 7.57.1, 7.59.2, 7.62.1, 7.62.3, 7.64.1, 7.66.1, 7.67.1, 7.67.2, 7.72.4, 7.72.5, 7.72.8–7.72.10, 7.73.2, 7.73.3 7.74.3, 7.74.4, 7.82.2, 7.82.3, 7.84.1, 7.91.1–7.91.6, 7.91.9–7.91.11, 7.91.13, 7.91.14, 7.93.1, 7.93.2, 7.97.2, 7.107.6, 9.10.1, 9.11.1–9.11.5, 9.23.4, 9.41.3, 10.44.2, Z.24.1, Z.33.5, Z.33.6, Z.33.8–Z.33.11, Z.33.15, Z.33.16, Z.33.18, Z.33.20, Z.33.21, Z.33.24, Z.42.4, Z.42.14, Z.48.13–Z.48.15, Z.49.2, Z.54.5, Z.54.6, Z.54.8–Z.54.13, Z.54.16, Z.54.17, Z.54.19, Z.54.23, Z.54.24, Z.54.26, Z.54.27, Z.54.30–Z.54.33, Z.54.35–Z.54.43, Z.54.50, Z.54.54, Z.54.56, Z.54.57, Z.54.59, Z.54.60, and Z.54.63; Implementation Guide No. 2016-1, Implementation Guidance Update—2016, Questions 4.9, 4.49, 4.70, 4.71, 4.73, 5.4, 5.7, 5.10, 5.38, and 5.41; Implementation Guide No. 2017-1, Implementation Guidance Update—2017, Questions 4.11, 4.32, 4.33, 4.38, 5.12, and 5.24–5.29; Implementation Guide No. 2017-2, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans, Question 4.16; Implementation Guide No. 2017-3, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting), Questions 4.3, 4.54, 4.137, 4.139, 4.140–4.142, 4.171, 4.188, 4.196–4.198, 4.270, 4.271, 4.297–4.299, 4.323–4.327, 4.410, 4.440, and 4.466; Implementation Guide 2019-1, Questions 4.7, 4.8, and 4.13; Implementation Guide No. 2019-2, Fiduciary Activities, Questions 4.17, 4.20, and 5.2; Implementation Guide No. 2019-3, Leases, Question 4.70; Implementation Guide No. 2020-1, Implementation Guidance Update—2020, Question 4.3; and 2002 AICPA State and Local Governments Audit and Accounting Guide, paragraphs 6.73, 8.34, 8.80, and 12.70.
Management’s Discussion and Analysis
4.  The basic financial statements should be preceded by management’s discussion and analysis (MD&A), which is required supplementary information (RSI). MD&A should provide an objective and easily readable analysis of the government’s financial activities based on currently known facts, decisions, or conditions. The financial managers of governments are knowledgeable about (a) the transactions and events that are reflected in the government’s financial report, (b) the fiscal policies that govern its operations and decision making, and (c) other conditions that may have a significant effect on financial position or results of operations. MD&A provides financial managers with the opportunity to present both short-term and long-term analyses of the government’s activities. MD&A should be written in a manner that can be understood by users who may not have a detailed knowledge of governmental accounting and financial reporting. MD&A also should include explanations and interpretations that help users understand the information provided.
5. MD&A should discuss the current-year balances and results in comparison with the prior year, with emphasis on the current year. This analysis should be fact based and should discuss the activities that have a positive and negative impact on the government’s balances and results in comparison with the prior year. The analysis should assist users in understanding why balances and results reported in the current year’s financial statements changed from the prior year rather than just the amounts or percentages by which they changed. The use of charts, graphs, and tables is encouraged to enhance the understandability of the information.
6. The analysis in MD&A should avoid unnecessary duplication. Certain explanations may be relevant to the discussion in multiple sections of MD&A, but those explanations should not be repeated after they have been presented initially. For example, a tax rate increase enacted during the year may affect the results in both the government-wide financial statements and the governmental fund financial statements; after the increase is discussed in the analysis of the government-wide statements (paragraph 8c(1)), that discussion should be referenced in the analysis of individual funds (paragraph 8c(2)) rather than duplicated unless there is a significant change resulting from the use of a different measurement focus.
7. MD&A should focus on the primary government. Information included in MD&A should distinguish between that of the primary government and its discretely presented component units. Determining whether to discuss matters related to a discretely presented component unit is a matter of professional judgment and should be based on the nature and significance of the individual component unit’s relationship to the primary government. When appropriate, the reporting entity’s MD&A should refer users to the component unit’s separately issued financial statements.
8. MD&A requirements established by this Statement are discussed below in general rather than specific terms to emphasize that financial managers should include the explanations that are most relevant to the information presented each year and should avoid “boilerplate” discussion. The information presented should be confined to the topics discussed in the five sections outlined below.
  1. Introduction. An overview of the basic financial statements, including the relationships of the statements to each other. The overview should focus on the significant differences in the types of information the financial statements provide. Governments also should reference the disclosure of measurement focuses and bases of accounting in the summary of significant accounting policies note, if appropriate.
  2. Financial Summary. Condensed financial information derived from government-wide financial statements comparing the current year to the prior year. Governments should present the information needed to support their analysis of financial position and results of operations required in subparagraph (c) below, including the following elements, if applicable:
    (1) Total assets, distinguishing between capital and other assets
    (2) Total deferred outflows of resources
    (3) Total liabilities, distinguishing between long-term liabilities and other liabilities
    (4) Total deferred inflows of resources
    (5) Total net position, distinguishing between the net investment in capital assets, restricted amounts, and unrestricted amounts
    (6) Program revenues, by major source, distinguishing between charges for services, operating grants and contributions, and capital grants and contributions
    (7) General revenues, by major source
    (8) Total revenues
    (9) Program expenses, at a minimum by function or identifiable activity, as appropriate
    (10) Total expenses
    (11) Excess (deficiency) before contributions to term and permanent endowments or permanent fund principal, transfers, and unusual or infrequent items
    (12) Contributions to term and permanent endowments or permanent fund principal
    (13) Transfers
    (14) Unusual or infrequent items
    (15) Change in net position
    (16) Ending net position.
  3. Detailed Analyses.
    (1) An analysis of the primary government’s financial position and results of operations to assist users in assessing whether financial position has improved or deteriorated as a result of the year’s operations. The analysis should address significant changes to both governmental activities and business-type activities as reported in the government-wide financial statements. In addition to reporting the amounts or percentages of significant changes, the analysis should explain the reasons for those changes from the prior year and indicate the magnitude of those changes. The analysis also should include facts, decisions, or conditions about which the user may not be aware, with the understanding that not all users may be from the government’s geographical area. That analysis should include a discussion of significant policy changes (such as changes in tax rates or fees, or the imposition of a hiring freeze) and important economic factors (such as changes in the tax or employment bases) that significantly affected operating results for the year, as applicable.
    (2) An analysis of balances and transactions of each major fund and nonmajor funds in the aggregate to assist users in assessing whether fund balances or fund net position have improved or deteriorated as a result of the year’s operations. In addition to reporting the amounts or percentages of significant changes, the analysis should explain the reasons for those changes from the prior year and indicate the magnitude of those changes. The analysis also should include facts, decisions, or conditions about which the user may not be aware. The analysis also should address restrictions, commitments, and assignments that significantly affect the availability of fund resources for future use. As noted in paragraph 6, the analysis of major funds and nonmajor funds in the aggregate should focus on explanations that differ from the analysis already required by paragraph 8c(1) rather than duplicating them.
  4. Significant Capital Asset and Long-Term Debt Activity.
    (1) A description of significant capital asset activity during the year, including certain intangible assets. This description should include a discussion of significant additions and disposals of capital assets and changes to commitments made for the acquisition of capital assets. The description should address any significant policy changes and economic factors relevant to the capital asset activity that occurred during the year.
    (2) A description of significant long-term debt, lease, public-private and public-public partnership (PPP), and subscription-based information technology arrangement (SBITA) activity during the year, including a discussion of such agreements entered into, changes in credit ratings, and changes to debt limitations that may affect the financing of planned facilities or services, if any. The description should address any significant policy changes and economic factors relevant to the long-term debt, lease, PPP, and SBITA activity that occurred during the year.
  5. Currently Known Facts, Decisions, or Conditions. A description of currently known facts, decisions, or conditions that are expected to have a significant effect on financial position (net position) or that are expected to produce significant differences from current period results of operations (revenues, expenses, and other changes in net position). Examples of the types of information that should be included in that description, if applicable, include the following:
    (1) Trends in relevant economic and demographic data, such as changes in population (total or specific age groups), customer base, income levels, building permits, enrollment, and unemployment rates.
    (2) Information about the subsequent year’s budget, such as:
    (a) Changes from the current year in the total amount available for appropriation, referring as needed to information about specific revenue sources (for taxes or fees, for example, changes in tax rates or fee amounts and changes in the economic bases or range of activities, respectively, to which they are applied)
    (b) Changes from the current year in planned spending, referring as needed to relevant explanatory factors such as inflation; labor contracts; new laws or regulations; and the addition, expansion, elimination, or reduction of programs
    (c) Expected changes in net position or fund balance.
    (3) Information about actions the government has taken after the end of the reporting period related to postemployment benefit liabilities, capital asset improvement plans, long-term debt, lease agreements, PPPs, and SBITAs.
    (4) Information related to actions other parties have taken that will affect the government, such as new legislation or regulations imposed on the government.
The above examples are not all-inclusive; information about any currently known facts, decisions, or conditions that are expected to have a significant effect on financial position or to produce significant differences from current period results of operations should be provided.
Unusual or Infrequent Items
9. Unusual or infrequent items are transactions and other events that are unusual in nature or infrequent in occurrence. Statement 62 defines the terms unusual in nature and infrequency of occurrence.
10. Governments should present unusual or infrequent items individually as the last presented flow(s) of resources prior to the net change in resource flows in the government-wide, governmental funds, and proprietary funds statements of resource flows. Governments should disclose in the notes to financial statements the program or function or identifiable activity to which an unusual or infrequent item is related, if applicable, and whether that item was within the control of management.
Presentation of Governmental Fund Financial Statements
Required Financial Statements—Governmental Funds
11. The financial statements required for governmental funds are (a) the short-term financial resources balance sheet and (b) the statement of short-term financial resource flows.
Measurement Focus and Basis of Accounting
12. The financial statements for governmental funds should be presented applying the short-term financial resources measurement focus and accrual basis of accounting. Measurement focus refers to what items should be reported as elements of financial statements. Basis of accounting refers to when those elements are recognized in the financial statements. The short-term financial resources measurement focus incorporates inflows of short-term financial resources and outflows of short-term financial resources and all short-term financial assets, deferred outflows of resources, liabilities, and deferred inflows of resources, and also reports fund balance. Applying an accrual basis of accounting, elements of financial statements arising from short-term transactions and other events are recognized as they occur, and elements of financial statements arising from long-term transactions or other events are recognized when payments are due. For the purposes of recognition in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, events that are recognized in financial statements include (a) transactions, which are external events between a government and another party or parties that have financial consequences for the government, and (b) other events, which include internal events (such as the allocation of inflows of resources to individual funds) and external events (such as changes in fair value). Financial assets in this measurement focus include cash, assets that are available to be converted to cash, and assets that are consumable in lieu of cash. All liabilities in this measurement focus are financial liabilities.
13. In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, recognition of elements is based on whether transactions or other events are short term or long term. Whether a transaction or other event is short term or long term is determined by the period of time that elapses between the inception of the transaction or relevant component part thereof or other event and the conclusion of the transaction or relevant component part thereof or other event as discussed in paragraphs 14–18.
  1. Short-term transactions and other events are those for which the period from inception to conclusion is one year or less.
  2. Long-term transactions and other events are those for which the period from inception to conclusion is greater than one year. If payments are made or received prior to the due date, elements from long-term transactions and other events (such as debt service principal and interest) are recognized when payments are made or received.
14. A transaction requires an action or actions by one or more of the parties thereto. An action is the transfer of control of resources (for example, the provision of a good or service) that a party to a transaction makes that establishes all or a portion of its rights or fulfills all or a portion of its obligations in that transaction.
  1. Inception of the transaction generally is when a party takes an action that results in initial recognition of an asset or liability.
  2. When a transaction requires only a single action by each party and those actions collectively result in a government that is a party to the transaction fully establishing its rights or entirely fulfilling its obligations, conclusion of the transaction generally is when the final payment of cash or other financial assets is due (the date at which payment is scheduled or, if not scheduled, expected to be made) according to the terms of the binding arrangement (or estimated payments if there is no binding arrangement or if the binding arrangement does not have specific payment terms).
  3. When a transaction requires multiple actions by a party or more than one party and the actions of all parties collectively result in a government that is a party to the transaction fully establishing its rights or entirely fulfilling its obligations, each action (or combination of related actions) that establishes a portion of that government’s rights or fulfills a portion of that government’s obligations is the relevant component part of the transaction to determine when the conclusion occurs. Conclusion of the action (or combination of related actions) generally is when the final payment of cash or other financial assets for the action (or combination of related actions) is due (the date at which payment is scheduled, or if not scheduled, expected to be made) according to the terms of the binding arrangement (or estimated payments if there is no binding arrangement or if the binding arrangement does not have specific payment terms).
15. A binding arrangement is an understanding between two or more parties that creates rights, obligations, or both among the parties to a transaction. A binding arrangement can be written, oral, or implied by the government’s existing practices; examples include legislation, contracts, and grant agreements.
16. A binding arrangement may produce one or more transactions for purposes of determining whether a particular transaction is short term or long term. The relationship between the actions required to be taken by the parties determines the component parts of the transaction. When none of the parties have completed any of their required actions, a transaction has not yet occurred. A transaction first occurs when one party completes a required action.
17. Recognition of an other event is based on the occurrence of the event. Inception is when occurrence of the event starts and conclusion is when occurrence of the event ends.
18. Once a transaction or other event is classified as either short term or long term, it should continue to be reported in that classification for financial reporting purposes even when there are changes in the existing binding arrangement’s terms or conditions. However, if a new binding arrangement is entered into (for example, a loan arrangement is entered into to replace an account payable), that transaction should be classified and reported.
Application of the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting in Governmental Funds
Assets and liabilities
19. Assets recognized in governmental fund financial statements are those that arise from short-term transactions and other events that meet the criteria in paragraphs 12 and 13a, which include inventories and prepaid expenses. All investments should be reported as assets consistent with the definition of financial assets that includes assets available to be converted to cash. In addition, assets arising from long-term transactions and other events should be recognized in the governmental fund financial statements when payments to be received become due.
20. Liabilities recognized in governmental fund financial statements are those that arise from short-term transactions and other events that meet the criteria in paragraphs 12 and 13a. In addition, long-term debt issued for short-term purposes is recognized as a liability. Liabilities arising from long-term transactions and other events are recognized when payments to be made become due except for long-term debt issued for short-term purposes, which is recognized as a short-term transaction. Payments to be made that have not yet become due on long-term transactions and other events are general long-term liabilities.
21. Examples of long-term debt issued for short-term purposes are tax anticipation notes and revenue anticipation notes with maturities beyond one year from inception of the transaction.
Inflows of resources and outflows of resources
22. Inflows of short-term financial resources for a reporting period in governmental fund financial statements are recognized for (a) short-term transactions and other events as they occur and (b) long-term transactions and other events when payments are due except for long-term debt issued for short-term purposes, which is recognized as a short-term transaction. Inflows of short-term financial resources for a reporting period in governmental fund financial statements include on-behalf payments for fringe benefits and salaries, and direct vendor financings (for example, leases).
23. Outflows of short-term financial resources for a reporting period in governmental fund financial statements are recognized for (a) short-term transactions and other events (such as use of goods and services and acquisition of capital assets) as they occur and (b) long-term transactions and other events when payments are due except for long-term debt issued for short-term purposes, which is recognized as a short-term transaction. Outflows of short-term financial resources for a reporting period in governmental fund financial statements include on-behalf payments for fringe benefits and salaries, and direct vendor financings (for example, leases). Depreciation and amortization should not be recognized as an outflow of resources because capital assets are not financial resources and are not recognized as assets.
Deferred outflows of resources and deferred inflows of resources
24. Deferred outflows of resources and deferred inflows of resources in governmental fund financial statements should be recognized for both short-term and long-term transactions and other events when the outflow (or inflow) of resources is applicable to a future reporting period.
25. Recognition of deferred outflows of resources and deferred inflows of resources is limited to those instances identified in GASB Statements. When a government imposes a tax for a period subsequent to the reporting period, the tax that is collected during the reporting period or reported as a receivable at the end of the reporting period should be recognized as a deferred inflow of resources.
Items arising from interfund events
26. Interfund balances and transfers should be recognized as short-term events even if the events from which they arise meet the criteria in paragraph 13b to be classified as long-term events.
Statement of Short-Term Financial Resource Flows
27. The statement of short-term financial resource flows should present the following information in the following sequence, using the all-inclusive format indicated:
Inflows of resources from current activities (detailed)
     Total inflows of resources from current activities
Outflows of resources from current activities (detailed)
    Total outflows of resources from current activities
Net flows from current activities
Net flows from noncurrent activities (detailed)
    Total net flows from noncurrent activities
Unusual or infrequent items (detailed)
Net change in fund balances
Fund balances—beginning of period
Fund balances—end of period
Each caption, subtotal, and total shown in the format above should be presented, as applicable. Current activities are all activities other than noncurrent activities. Noncurrent activities are activities related to the acquisition and disposal of capital assets and the issuance and repayment of capital-related liabilities (for example, leases) and long-term debt, except for long-term debt issued for short-term purposes. The terms revenues and expenditures are no longer applicable to governmental funds.
Amendments to Statement 54
28. Governmental fund types include the general fund, special resources funds, capital projects funds, debt service funds, and permanent funds. Special resources funds are used to account for and report the proceeds of specific inflows of short-term financial resources from current activities other than transfers that are restricted or committed to use for specified purposes other than debt service or capital projects.
Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position
29. The statement of revenues, expenses, and changes in fund net position should distinguish between operating and nonoperating revenues and expenses (as discussed in paragraph 31), as well as separately report noncapital subsidies (a type of nonoperating revenue and expense).
30. The statement of revenues, expenses, and changes in fund net position should present the following information in the following sequence using the all-inclusive format indicated:
Operating revenues (detailed)
    Total operating revenues
Operating expenses (detailed)
    Total operating expenses
         Operating income (loss)
Noncapital subsidies (detailed)
    Total noncapital subsidies
         Operating income (loss) and noncapital subsidies
Other nonoperating revenues and expenses (detailed)
    Total other nonoperating revenues and expenses
         Income (loss) before unusual or infrequent items
Unusual or infrequent items (detailed)
    Increase (decrease) in fund net position
Fund net position—beginning of period
Fund net position—end of period
Each caption, subtotal, and total shown in the format above should be presented, as applicable.
Definition of Operating Revenues and Expenses and Description of Nonoperating Revenues and Expenses
31. Operating revenues and expenses are revenues and expenses other than nonoperating revenues and expenses. Nonoperating revenues and expenses are (a) subsidies received and provided, (b) revenues and expenses related to financing, (c) resources from the disposal of capital assets and inventory, and (d) investment income and expenses. Revenues and expenses that otherwise would be classified as nonoperating in most proprietary fund financial statements should be classified as operating revenues and expenses if those transactions constitute the proprietary fund’s principal ongoing operations. For example, interest revenues and expenses should be reported as operating revenues and expenses by a proprietary fund established to provide loans to first-time homeowners. Consistent with the classifications in the statement of cash flows, revenues and expenses of certain loan programs as described in paragraph 19 of Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting, should be reported as operating revenues and expenses.
Definition of Subsidies
32. Subsidies are (a) resources received from another party or fund to keep rates lower than otherwise would be necessary to support the level of goods and services to be provided or (b) resources provided to another party or fund that results in higher rates than otherwise would be established for the level of goods and services to be provided.
Information about Major Component Units in Basic Financial Statements
33. In basic financial statements, governments should present each major component unit in a separate column in the reporting entity’s statements of net position and activities, if it does not reduce the readability of the statements. If presenting each major component unit in a separate column in the reporting entity’s statements of net position and activities reduces the readability of the statements, combining statements of major component units should be included in the reporting entity’s basic financial statements after the fund financial statements.
Budgetary Comparison Information
34. Budgetary comparison schedules should be presented as RSI for the general fund and each major special resources fund that has a legally adopted annual budget. Separate columns for the variances between (a) original and final budget amounts and (b) final budget amounts and actual budget results are required to be presented. An analysis of significant variations between original and final budget amounts and final budget amounts and actual budget results also is required to be presented in notes to RSI. The analysis should include any currently known reasons for those variations that are expected to have a significant effect on budgetary fund balance or to produce significant differences from current period budgetary results.
Statistical Section
Financial Trends Information
Information about Changes in Net Position
35. In the statistical section of separately issued financial reports, governments engaged only in business-type activities or only in business-type and fiduciary activities should present revenues by major source for their business-type activities, distinguishing between operating, noncapital subsidy, and other nonoperating revenues and expenses.

EFFECTIVE DATE AND TRANSITION

36. The requirements of this Statement are effective based on a government’s total annual revenues in the first fiscal year beginning after June 15, 2022, as follows:
  1. Governments with total annual revenues of $75 million or more should apply the requirements of this Statement for fiscal years beginning after June 15, 2024, and all reporting periods thereafter.
  2. Governments with total annual revenues of less than $75 million should apply the requirements of this Statement for fiscal years beginning after June 15, 2025, and all reporting periods thereafter.
Earlier application is encouraged. If a primary government chooses early implementation of this Statement, all component units also should implement this Statement in the same year, as discussed in paragraph 37.
37. For purposes of determining the appropriate implementation period, revenues include all revenues of the primary government’s governmental activities and business-type activities, except for revenue-related extraordinary and special items. Governments engaged only in fiduciary activities should use total annual additions, rather than revenues, to determine the appropriate implementation period. All component units should implement the requirements of this Statement in the same year as their primary government, subject to the provisions of paragraph 59 of Statement 14, regardless of the amount of each component unit’s total revenues.
38. Changes adopted to conform to the provisions of this Statement should be applied retroactively by restating financial statements, if practicable, for all prior periods presented. If restatement for prior periods is not practicable, the cumulative effect, if any, of applying this Statement should be reported as a restatement of beginning fund balance for the earliest period restated. Also, the reason for not restating prior periods presented should be disclosed. In the first period that this Statement is applied, the notes to financial statements should disclose the nature of the restatement and its effect.
39. In the first period that this Statement is applied, governments are not required to restate prior periods for purposes of providing the comparative data for MD&A as required in paragraph 8. However, governments are encouraged to provide comparative analyses of key elements of governmental activities and business-type activities as reported in the government-wide financial statements in MD&A for that period.
40. The provisions in paragraph 35 may be applied prospectively.
The provisions of this Statement need not be applied to immaterial items.

Appendix A: BACKGROUND

A1. Issued in June 1999, Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, was the culmination of 15 years of research, deliberation, and due process. In Statement 34, the GASB established a model for state and local government financial reporting—the formats and measurement focuses and bases of accounting of the basic financial statements, certain related notes to financial statements, and required supplementary information (RSI), including management’s discussion and analysis (MD&A).
A2. Among its many features, Statement 34 introduced government-wide financial statements containing information reflecting the economic resources measurement focus and accrual basis of accounting—which notably included the reporting of infrastructure, other capital assets, and long-term liabilities—for governmental activities. Governmental activities previously were reported only under the current financial resources measurement focus and modified accrual basis of accounting in the governmental funds, using account groups for capital assets and long-term debt. Statement 34 also required a narrative MD&A to precede the financial statements, added the presentation of the original budget to the required budgetary comparison schedules, introduced major fund reporting for governmental and enterprise funds, and added note disclosures related to capital asset and long-term liability activity during the reporting period.
A3. Statement 34 was first effective for periods beginning after June 15, 2001. Most provisions of the Statement became effective in three phases, beginning with the largest governments. Up to an additional 4 years were allowed for Phase 1 (annual revenues of $100 million or more) and Phase 2 ($10 million to $100 million) governments to retroactively report existing infrastructure assets. Phase 3 governments (below $10 million) were allowed to report general infrastructure prospectively. All requirements were effective for all governments for periods beginning after June 15, 2006.
A4. The financial reporting model has a pervasive influence over the effectiveness of financial reporting by state and local governments and the ability to achieve the objectives of financial reporting. As a result, the Board decided that it was important, as part of its commitment to maintaining the effectiveness of its standards, to reexamine the existing financial reporting model now that it has been in place for an appreciable length of time.
A5. An additional reason for undertaking this project is to continue the development of recognition concepts for information presented in governmental funds. Feedback on the Preliminary Views, Recognition of Elements of Financial Statements and Measurement Approaches, issued in June 2011, included recommendations that recognition concepts for governmental funds be developed in conjunction with a reexamination of the existing financial reporting model. The Board suspended work on the conceptual framework project on recognition pending reexamination of the financial reporting model in 2012.
A6. The Board added the reexamination of the existing financial reporting model as a pre-agenda research activity in August 2013. The initial phase of the pre-agenda research was exploratory in nature and established the specific objectives of the more extensive research activities. During 2013, the staff conducted three related research efforts:
  1. A review of the relevant literature related to the financial reporting model
  2. Archival research of financial reports of a random sample of 465 governments of various types and sizes to collect information about how governments currently comply with the requirements related to the financial reporting model
  3. A series of 11 research roundtables conducted with a wide variety of types of preparers, auditors, and users of financial statements, which were used to identify key issues related to the financial reporting model in practice.
A7. Following the analysis of the results of the initial phase of research, the staff conducted broad-based surveys of preparers, auditors, and users. A separate survey was conducted with preparers whose governments implemented Statement 34 using the modified approach to report infrastructure assets. The intent of the surveys was to obtain feedback from a broader group of constituents about the key issues identified in the preceding research efforts. The final phase of the research involved in-depth interviews with preparers, auditors, and users to further investigate the issues raised in the earlier stages of the research and to seek additional explanation of major and common concerns.
A8. The pre-agenda research showed that most of the components of the existing financial reporting model are effective; however, certain areas in which improvements could be made were identified. After considering the results of the pre-agenda research, this project was added to the Board’s current technical agenda in September 2015 to consider potential improvements.
A9. An initial public comment document, Invitation to Comment, Financial Reporting Model Improvements—Governmental Funds, was issued in December 2016. The Invitation to Comment sought feedback from stakeholders on potential improvements to the existing financial reporting model related to governmental fund financial statements, including (a) the measurement focus, (b) the presentation format of the statement of resource flows, (c) specific terminology (for example, line item descriptions that more clearly communicate the measurement focus), (d) the reconciliation to the government-wide financial statements, and (e) whether a governmental fund statement of cash flows should be presented in the basic financial statements in conjunction with some of the measurement focus alternatives. The Board received 111 written responses to the Invitation to Comment from organizations and individuals. In addition, the Board received oral responses from and had the opportunity to further explore the views of 48 individuals or groups at 5 public hearings and 30 individuals at 3 user forums.
A10. During the comment period on the Invitation to Comment, the Board began its initial deliberations of issues related to government-wide financial statements, proprietary funds, and budgetary comparison information—issues not addressed in the Invitation to Comment. From August 2017 through September 2018, the Board discussed and reached tentative conclusions on the issues related to governmental funds presented in the Invitation to Comment in light of the feedback provided by stakeholders.
A11. In September 2018, the Board issued a Preliminary Views, Financial Reporting Model Improvements. The Preliminary Views addressed recognition concepts and their application for governmental funds, presentation of governmental fund financial statements, presentation of proprietary fund financial statements, budgetary comparison information, communication of major component unit information, and a schedule of government-wide expenses by natural classification. The Board received 151 written responses to the Preliminary Views from organizations and individuals. In addition, the Board received oral responses from and had the opportunity to further explore the views of 30 individuals or groups at 3 public hearings and 22 individuals at 2 user forums.
A12. During the comment period on the Preliminary Views, the GASB conducted a field test to obtain information from financial statement preparers about the potential cost, effort, and issues associated with the implementation of the provisions of the Preliminary Views. The Board received 67 completed field tests from governments of all types and sizes. Also during the comment period, the Board began its initial deliberations of issues related to MD&A, debt service fund information, and special and extraordinary items—issues not addressed in the Preliminary Views. From April 2019 through June 2020, the Board discussed and reached tentative conclusions on the issues presented in the Preliminary Views in light of the feedback provided by stakeholders.
A13. Feedback from the Governmental Accounting Standards Advisory Council (GASAC) was sought at 12 of its 14 meetings throughout the Board’s deliberations that led to the Exposure Draft of this Statement. In addition, the Board assembled a task force for both this project and the recognition concepts project to gather input from members broadly representative of the GASB’s stakeholders. Task force members (a) met with the Board in June 2016 and September 2017 to discuss the Board’s tentative decisions and (b) provided feedback on issues discussed by the Board on a continual basis throughout the project. The Board’s consideration of the individual feedback from both the GASAC members and task force members is incorporated throughout Appendix B. When project issues are discussed with task force members and GASAC members, those groups do not take formal positions either in support of or in opposition to those issues.

Appendix B: BASIS FOR CONCLUSIONS AND ALTERNATIVE VIEW

Basis for Conclusions
Introduction
B1. This appendix discusses factors considered significant by Board members in reaching the conclusions in this Statement. It includes discussion of the alternatives considered and the Board’s reasons for accepting some and rejecting others. Individual Board members may have given greater weight to some factors than to others.
Scope of This Statement
B2. As part of the Board’s commitment to maintaining and improving the effectiveness of its standards, it added the reexamination of the existing financial reporting model requirements as a pre-agenda research activity. The pre-agenda research was exploratory in nature and considered all requirements of the financial reporting model provided in Statement 34. The results of the pre-agenda research showed that most of the components of the financial reporting model are effective; however, certain areas in which improvements could be made were identified. Based on stakeholder feedback received during the pre-agenda research, the Board shifted the approach to this project to identifying specific potential improvements to the existing financial reporting model, rather than taking a “clean slate” approach that could result in a completely new financial reporting model. Accordingly, this project is not introducing changes to every aspect of the existing financial reporting model.
B3. The Board determined that to (a) improve the effectiveness of the financial reporting model in providing information that is essential for decision making and assessing a government’s accountability and (b) address certain application issues, it was most appropriate to only establish requirements to improve certain key components of the financial reporting model. Those key components include (1) MD&A; (2) unusual or infrequent items; (3) presentation of governmental fund financial statements; (4) application of the short-term financial resources measurement focus and accrual basis of accounting in governmental funds; (5) presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position; (6) information about major component units in basic financial statements; (7) budgetary comparison information; and (8) financial trends information. As discussed in paragraphs B76–B80, other potential improvements were considered by the Board but ultimately not required.
MD&A
B4. Participants in the pre-agenda research believe that MD&A is effective in providing information that is essential for decision making and that enhances the ability to assess a government’s accountability. MD&A accomplishes that through its role of providing an objective and easily readable analysis of the government’s financial activities; however, potential opportunities for improvement were identified in the pre-agenda research. Those potential opportunities included (a) reducing the boilerplate information included in MD&A, (b) increasing the focus on the explanations of the reasons for changes from year to year in the government-wide financial statements and fund financial statements, (c) reducing repetition within MD&A, and (d) clarifying the requirements related to currently known facts, decisions, or conditions.
Boilerplate Information
B5. Some participants in the pre-agenda research provided feedback that MD&A contained boilerplate information. Paragraph 11 of Statement 34, as amended, stated that governments should avoid a boilerplate discussion. In evaluating that feedback, the Board considered boilerplate information in terms of specific information presented in MD&A that generally is the same from government to government. The only MD&A requirement in this Statement that generally would result in the same presentation for all governments is the requirement to present a brief discussion of the basic financial statements, including the relationship of the statements to each other, and the significant differences in the information they provide. The Board believes that experienced users of governmental financial statements already would be aware of the nature of the different financial statements, but less experienced users need that information to understand the other components of MD&A.
B6. The GASB’s conceptual framework discusses users in two different contexts. Paragraph 63 of Concepts Statement No. 1, Objectives of Financial Reporting, notes when explaining the qualitative characteristic of understandability that “Users of governmental reports tend to have different levels of knowledge and sophistication about governmental accounting and finance. To be publicly accountable, a government should issue financial reports that can be understood by those who may not have a detailed knowledge of accounting principles. Those reports should include explanations and interpretations that help users understand the information provided. However, financial reporting should not exclude information merely because it is difficult to understand or because some users choose not to use it.” Paragraph 21 of Concepts Statement No. 3, Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements, states, “The messages contained in financial reports are intended for users. To effectively interpret these messages, the user is responsible for obtaining a reasonable understanding of government and public finance activities and of the fundamentals of governmental financial reporting, for studying the messages with reasonable diligence, and for applying relevant analytical skills.”
B7. The Board believes that users with all levels of knowledge and sophistication about governmental accounting and finance read MD&A and inform decisions and assess accountability based on the information contained within MD&A. As a result, the Board believes the requirement to present an overview of the basic financial statements and the significant differences in the information they provide is necessary to help users understand the information in those statements. Although the Board believes that the “reasonable understanding” threshold of a user should be applied to information communicated in basic financial statements, the Board also believes that an objective of MD&A is to communicate information to a broad range of users.
Focus on Explanations
B8. Some participants in the pre-agenda research provided feedback that the analysis contained in MD&A could be improved. Those participants did not suggest that the information being considered for comparison was inappropriate but, rather, that the explanations of reasons for changes from year to year were not thorough enough.
B9. The previous requirements for analysis of the government’s overall financial position, results of operations, and results of individual funds stated that the reasons for significant changes should be presented. As a result of the participant feedback, the Board concluded that the previous requirements should be modified to emphasize the focus on the detailed analysis of those comparisons, including the magnitude of the reasons for those changes, to improve the understandability of MD&A.
Repetition
B10. Some participants in the pre-agenda research identified repetition within the analysis section of MD&A as a concern because the repetition diminished its readability. The previous guidance related to MD&A does not specifically require that repetition be avoided. Footnote 7 of Statement 34 indicated that information in MD&A should not be duplicated in the letter of transmittal, if presented. However, the Board concluded that the previous requirements related to information in MD&A should be modified to also indicate that the analysis should be presented in a manner that avoids unnecessary duplication.
Currently Known Facts, Decisions, or Conditions
B11. The pre-agenda research identified that (a) there is a wide variety of information being presented in this component of MD&A and (b) users participating in the pre-agenda research ranked the presentation of currently known facts, decisions, or conditions as the component of MD&A that is most useful when it addresses pertinent issues. The Board determined that the presentation of currently known facts, decisions, or conditions could be improved by providing clearer guidance to enhance the usefulness of the information presented.
B12. The Board concluded that the most effective way to improve the usefulness of the presentation of currently known facts, decisions, or conditions would be to modify the previous guidance by requiring the inclusion of specific types of information. Recommendations for additional information to require in this component of MD&A were provided by pre-agenda research participants. Those recommendations included a discussion of (a) the overall economic condition of the government, (b) specific pension-related information, (c) a government’s capital improvement plan, (d) new regulations or standards and legislative changes imposed on a government, and (e) forward-looking information. However, the Board determined that requiring certain types of information posed challenges because in some instances it could prove to be too limiting and exclude information that is necessary to provide context on facts, decisions, or conditions that will have an effect on financial position or results of operations. Because MD&A is RSI, only items required by GASB standards can be presented.
B13. As a result, the Board concluded that it would be beneficial to modify the previous authoritative guidance by including examples of specific types of information that should be included in this component of MD&A. By providing examples, rather than specific requirements, the Board would avoid providing specificity that could exacerbate the issue of MD&A being too “boilerplate” and allow financial managers to conform the information in this section to the specifics of their government.
Budgetary Analysis
B14. Paragraph 11e of Statement 34 required a discussion of significant variations between original and final budget amounts and between final budget amounts and actual budget results—the same variances that are required to be presented as RSI in this Statement. Because the Board believes that budgetary comparison information should be presented as RSI, as discussed in paragraphs B67–B71, the Board concluded that the discussion of variances should be presented as notes to RSI so that the analysis of variances would be presented closer to the variances themselves. The Board believes that it is not appropriate to discuss budgetary variance information in MD&A because MD&A should focus on information in the basic financial statements, and budgetary comparison information is not part of the basic financial statements.
Modified Approach
B15. Paragraph 11g of Statement 34 required that certain information about the modified approach presented in RSI be summarized and presented in MD&A. Similar to the budgetary comparison information, because the modified approach information is required to be presented as RSI, the Board concluded that the discussion should be presented only in the notes to RSI. As a result, the Board decided to remove the requirement to present information about infrastructure assets accounted for using the modified approach from MD&A.
Unusual or Infrequent Items
B16. Statement 34 required that the resource flows statements separately present transactions and other events that are both unusual in nature and infrequent in occurrence— extraordinary items—as well as transactions and other events that are within the control of management and either unusual in nature or infrequent in occurrence—special items. The results of the pre-agenda research indicated that most stakeholders find the separate presentation of special and extraordinary items to be valuable because of (a) the importance of separating normal and continuing operations from one-time events, (b) the importance of drawing attention to unusual or uncommon events and transactions, (c) its usefulness in performing trend analysis, and (d) its usefulness in comparing governments.
B17. The reasons identified for finding the separate presentation of special and extraordinary items valuable focused on the unusual nature or infrequency of occurrence of the items and did not extend to whether the items were either unusual in nature or infrequent in occurrence or both, or whether the items were within the control of management. In practice, identifying whether an item is both unusual in nature and infrequent in occurrence or whether the item has only one of those characteristics was found to be challenging. After consideration of the findings of the pre-agenda research, the Board decided to retain the separate presentation of unusual or infrequent transactions and other events. However, to simplify the process of identifying and presenting those items, the Board concluded that they should be renamed “unusual or infrequent items” and should be required to be presented separately regardless of whether the item had one or both of these characteristics or was within control of management. The Board also concluded that information regarding whether the item was within the control of management, one of the characteristics of special items, should be conveyed through a disclosure in notes to financial statements in accordance with the provisions in paragraph 10 of this Statement.
Information in Governmental Fund Financial Statements
Concerns with the Existing Reporting of Governmental Fund Information
B18. The guidance based on the conclusions of the Board with respect to (a) the application of the short-term financial resources measurement focus and accrual basis of accounting in governmental fund financial statements and (b) the presentation of governmental fund financial statements is designed to address concerns with the prior reporting of governmental fund information.
Effectiveness of governmental fund information
B19. After extensive stakeholder outreach and consideration of that input, the Board determined that governmental fund financial statements have not been as effective as they could have been in providing information that is essential for decision making and assessing a government’s fiscal accountability. The term fiscal accountability refers to the responsibility of governments to justify that their actions in the current period have complied with public decisions concerning the raising and spending of public resources in the short term (usually one budgetary cycle or one year). The information in those statements maintains a shorter time perspective than the government-wide financial statements and focuses on financial resources rather than economic resources. Some participants in the pre-agenda research noted that the effectiveness of the governmental fund financial statements was diminished by conceptual inconsistencies and the absence of guidance for complex transactions, as discussed below. Furthermore, the Board concluded that it was not sufficiently clear from the descriptions used in financial statements that the information provided was from a short-term perspective. If the governmental fund financial statements were relied on exclusively by certain users, the potential for making decisions and assessments with incomplete information existed.
Conceptual consistency
B20. The current financial resources measurement focus and modified accrual basis of accounting for reporting in governmental funds did not have a conceptual foundation. Rather, it was applied as a collection of accounting conventions. The accounting principles that were applied through the current financial resources measurement focus and modified accrual basis of accounting reflected the goal of maintaining what traditionally had been a shorter time perspective in the governmental fund financial statements than is found in financial statements presented applying the economic resources measurement focus and accrual basis of accounting. For example, the proceeds from an issuance of long-term debt were reported as other financing sources in the governmental fund statement of revenues, expenditures, and changes in fund balances, whereas, repayments of long-term debt were reported as expenditures. In that financial statement, acquisitions of capital assets also were reported as expenditures. This reflected the fact that, from a shorter time perspective, those transactions produce or require the use of current financial resources. Yet, those statements still included the effects of transactions involving certain assets, such as long-term receivables, that did not reflect a shorter time perspective. Consequently, the resultant information conveyed in financial statements presented applying the current financial resources measurement focus and modified accrual basis of accounting was conceptually inconsistent.
B21. As a result of the application of those accounting conventions, concerns were expressed by some stakeholders that financial statements presented applying the current financial resources measurement focus and modified accrual basis of accounting reported assets that did not consistently reflect a shorter time perspective. Some inconsistencies arose because the accounting conventions associated with the current financial resources measurement focus and modified accrual basis of accounting for reporting governmental funds were developed before financial statements for most governmental activities were required to be reported applying the economic resources measurement focus and accrual basis of accounting in the government-wide financial statements. Other issues arose because the recognition guidance for certain transactions was developed after the account group limitations were established. For example, when the general fixed assets account group was part of governmental financial reporting, prior to the implementation of Statement 34, the reporting was limited to reporting general fixed assets.
Guidance for complex transactions
B22. Another concern raised about governmental fund financial statements was how to report the effects of more complex transactions, such as those involving derivative instruments. Existing guidance for those transactions does not address reporting in governmental funds, and there were no concepts on which to base any authoritative guidance. Because those complex transactions are unlike the transactions for which guidance for reporting in governmental funds existed, it would not have been appropriate to apply the current financial resources measurement focus and modified accrual basis of accounting conventions to them. As a result, the Board concluded that a conceptual foundation of what should be recognized in governmental fund financial statements was needed to determine the appropriate accounting standards for those transactions.
Lack of consistency in short-term perspective
B23. Under the current financial resources measurement focus and modified accrual basis of accounting, revenue was recognized when the underlying transaction or other event occurred and it was both measurable and available. Available meant that payment was received during the reporting period or soon enough thereafter to be used to finance expenditures of the reporting period. Previous guidance required the use of a period of availability of up to 60 days beyond period-end for recognition of property tax revenues. In addition, governments were allowed to adopt another accounting policy that reflected a different period of availability for other revenue sources. Some governments adopted a policy reflecting a short period of availability, such as 60 or 90 days, for those other revenue sources, whereas other governments adopted a policy reflecting a longer period of availability, such as one year. The Board determined that comparability of information among governments was reduced because governments did not use the same period of availability for revenue recognition.
Alternatives Considered and Rejected
B24. During the development of the measurement focus and basis of accounting for governmental funds, the Board considered several alternatives, including a budget-focused model, a near-term financial-resources-focused model, a total-financial-resources-focused model, an economic-resources-focused model, and a model that combined some aspects of these other models.
Measurement focus and basis of accounting used for a government’s budget
B25. An alternative considered by the Board for addressing the issues with governmental fund financial statements was to present those financial statements applying a government’s budgetary measurement focus and basis of accounting. This would have maintained the traditional emphasis of governmental fund financial statements on fiscal accountability. It also would have had the potential to simplify financial reporting and reduce costs for preparers. However, the Board rejected this alternative because this approach would have substantially reduced comparability of governmental fund information among governments given that not all governments budget using the same measurement focus and basis of accounting. Additionally, some governments are required to budget using generally accepted accounting principles (GAAP) for governmental funds. Those governments would no longer have a GAAP basis for budgeting. Furthermore, the Board concluded that this alternative would not have addressed the concerns with conceptual consistency, guidance for complex transactions, or lack of consistency that are addressed in the short-term perspective.
Near-term financial resources measurement focus and accrual basis of accounting
B26. Another alternative considered by the Board was to present the financial statements applying the near-term financial resources measurement focus and accrual basis of accounting. This approach would have applied a recognition period of 60–90 days from the date of the financial statements and would have applied recognition terms based on what is normal for all governments. Information provided by financial statements presented applying the near-term financial resources measurement focus and accrual basis of accounting would have been useful for assessing fiscal accountability and would have provided an amount for fund balance that is useful for assessing amounts available for spending in future periods on a basis that is closer to how many governments budget. The concerns with this approach focused on the complexity of application. Use of a recognition period of 60–90 days was considered problematic for some transactions, such as certain grants. Use of recognition terms based on what is normal for all governments was determined to be particularly challenging. The term normally was used in the past, in conjunction with the provision “normally [expected] to be liquidated with expendable available financial resources” beginning with NCGA Statement 4, Accounting and Financial Reporting Principles for Claims and Judgments and Compensated Absences, in 1982. However, determining what recognition terms are normal for governments of different sizes, types, and geographic locations for every class of transaction would consume significant time and resources of the Board, preparers, or auditors with resulting costs both in the initial implementation period and in each period thereafter. Furthermore, some stakeholders questioned the value of presenting certain transactions in a manner different from the terms of the government’s binding arrangement in cases in which the terms of the binding arrangement are not the same as what is considered to be normal for all governments.
Total financial resources measurement focus and accrual basis of accounting
B27. Another alternative considered by the Board was to present the financial statements applying the total financial resources measurement focus and accrual basis of accounting. This alternative would have recognized all financial assets and liabilities except for capital-related debt. Under this alternative, acquisition of capital assets and issuance of capital-related debt would have been reported as outflows of resources and inflows of resources rather than assets and liabilities. The Board rejected this alternative because of several concerns. One concern was that this alternative failed to provide a shorter time perspective and information useful for assessing fiscal accountability. For example, fund balance applying this alternative would not be useful for assessing short-term financial health because it would reflect the recognition of long-term liabilities such as long-term debt, net pension obligations, and net other postemployment benefit (OPEB) obligations but would not reflect the future inflows of resources that are expected to be used to pay those liabilities. In order to provide short-term information, the Board determined that a governmental fund statement of cash flows would be needed. However, the Board believes that the expected benefits of the incremental information provided in a statement of cash flows would not justify the perceived costs of preparing and auditing that information.
Economic resources measurement focus and accrual basis of accounting
B28. Another alternative considered by the Board was to present the financial statements applying the economic resources measurement focus and accrual basis of accounting. According to the pre-agenda research, the traditional emphasis of governmental fund financial statements on fiscal accountability continues to provide valuable information. Some stakeholders stated that reporting by major fund as well as applying a measurement focus and basis of accounting that meets the objective of demonstrating fiscal accountability provided particularly valuable information. The operational accountability information that would have been provided by the economic resources measurement focus and accrual basis of accounting was considered by the Board but was determined to be inconsistent with governmental fund reporting. In order to demonstrate operational accountability for governmental activities, the Board believes that financial statements would need to be presented by major activities, at a minimum. The fact that each governmental fund generally reports only a portion of a major governmental activity is inconsistent with this perspective. In addition, the evaluation of economic transactions, rather than shorter term inflows and outflows, is key to evaluating operational accountability. Furthermore, the governmentwide financial statements are presented applying the economic resources measurement focus and accrual basis of accounting, which is consistent with the objective of demonstrating operational accountability.
B29. Another concern with the application of the economic resources measurement focus and accrual basis of accounting is the effect it would have had on fund structure and related linkage to budgetary reporting. The Board believes that reporting capital assets and long-term liabilities in governmental funds, two significant changes to current reporting in governmental fund financial statements, would have posed challenges. Reporting those items in the fund that is used to acquire a capital asset or make payments on long-term financings would have resulted in a presentation much like the reporting of the general fixed asset and general long-term debt account groups in the reporting model prior to Statement 34. That presentation would not have resulted in activities accounted for in the general fund and special resources funds being reported on an economic resources measurement focus and accrual basis of accounting. If those items were reported as part of the functions or activities that use those capital assets or generate the resources used for debt service, the existing fund structure would have been substantially changed, such that linkage to budgetary reporting generally would have been lost. As a result, the Board concluded that neither approach would be consistent with the objective of improving the financial reporting model to meet or more fully meet as many of the objectives of financial reporting as possible.
B30. An additional concern with the application of the economic resources measurement focus and accrual basis of accounting is the loss of information about the flows of financial resources associated with capital assets and related long-term liabilities. That information could be provided by additionally requiring the presentation of a statement of cash flows for governmental funds. However, the Board believes that the expected benefits of the incremental information provided in a statement of cash flows would not justify the perceived costs of preparing and auditing that information.
Combination of approaches
B31. Another alternative considered by the Board was to combine certain approaches— providing information using the budgetary measurement focus and basis of accounting, as well as a standardized shorter term measurement focus and basis of accounting and a long-term financial-resources-based measurement focus and basis of accounting. Presenting governmental fund information using multiple measurement focuses and bases of accounting would have eliminated potential deficits in information provided by any single measurement focus and basis of accounting. However, the Board concluded that this approach would have been overly complex for most stakeholders and would have resulted in unnecessary confusion to users regarding which amounts within the various approaches in the presentation are the most representationally faithful. Another concern with this approach is the added costs for governments to prepare and audit multiple, rather than one, measurement focus and basis of accounting presentations for governmental fund financial statements.
Development of the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
B32. In the Preliminary Views, the Board proposed a definition of the short-term financial resources measurement focus as a measurement focus that incorporated elements of financial statements arising from short-term transactions and other events as they occur and elements of financial statements arising from long-term transactions and other events when payments are due. Items arising from short-term transactions and other events were described as those that normally are due to convert to or generate cash (or other financial assets) or require the use of cash (or other financial assets) entirely within one year from the inception of the transaction or other event. Items arising from long-term transactions and other events were described as those normally due to convert to or require the use of cash (or other financial assets) in periods that extend beyond one year from the inception of the transaction or other event.
B33. The Preliminary Views included alternative views with respect to the short-term financial resources measurement focus. The alternative views proposed modifying the short-term financial resources measurement focus to include the portion of all financial assets and liabilities that matures or is otherwise expected to be paid in cash or other fund financial resources within one year from the date of the financial statements, with the exception of pension, OPEB, and asset retirement obligations. The second modification proposed in the alternative views was to replace the concept of normally with (a) the stated or contractual maturities of financial assets and liabilities or (b) the best estimate of periods of receipt or payment if there are no stated or contractual maturities.
Combination of Features
B34. After considering the feedback on the Preliminary Views regarding the short-term financial resources measurement focus and the alternative views from public hearings, user forums, comment letters, and field test participants, the Board evaluated each of the following major features of the preliminary and alternative views: the recognition terms, the recognition method, and the recognition period.
Recognition terms
B35. The short-term financial resources measurement focus as described in the Preliminary Views based recognition terms on what is normal for governments in general. However, the alternative views based recognition terms on contractual terms (or estimated payments when there are no contractual terms). As previously noted, feedback on the Preliminary Views indicated a number of concerns with the use of normally in recognition terms, including (a) determining which transactions constituted a class of transactions would be challenging; (b) what is normal for certain types of governments, such as states, may not be normal for other governments, such as cities; and (c) applying what is normal for many governments may produce confusing results for outlier transactions. Feedback also identified certain limitations to the use of contractual terms for recognition. After considering the challenges to both alternatives, the Board decided that recognition terms should be based on contractual terms—or, more broadly, the terms of the binding arrangement or estimated payments if either there is no binding arrangement or the binding arrangement does not include specific payment terms.
Recognition method
B36. Both the short-term financial resources measurement focus as described in the Preliminary Views and the alternative views would have recognized items resulting from short-term transactions using the same criterion—when the underlying transaction or other event occurs. However, the recognition method for items resulting from long-term transactions and other events was different. The short-term financial resources measurement focus as described in the Preliminary Views would have recognized items arising from long-term transactions and other events when payment is due. The alternative views would have recognized items arising from long-term transactions and other events (with the exception of postemployment benefits and asset retirement obligations) for which payments are due within the subsequent reporting period. The Board decided that recognition terms for long-term transactions and other events should be based on when payments are due. The primary considerations were that (a) recognizing payments due within the subsequent reporting period would be conceptually inconsistent, in that amounts due for postemployment benefits and asset retirement obligations cannot be determined on that basis and, therefore, would be excluded, and (b) in many cases, using a one-year period from the date of the fiscal year-end could be viewed as presenting information that was not a faithful representation of a short-term model.
Recognition period
B37. Both the short-term financial resources measurement focus as described in the Preliminary Views and the alternative views would have used a recognition period of one year. The short-term financial resources measurement focus as described in the Preliminary Views would have applied the recognition period in distinguishing between short-term and long-term transactions and other events. The alternative views would have applied the recognition period to long-term transactions and other events by requiring the accrual of payments expected to be made in the subsequent reporting period. When considering which recognition characteristics to include in this Statement, the Board also evaluated a near-term recognition period of 60–90 days—one of the alternatives in the Invitation to Comment. The near-term recognition period may be more consistent with recognition under a government’s budgetary basis and is closer to the previous guidance for recognition in governmental funds. However, the Board determined that a one-year recognition period should be applied because it eliminates certain inconsistencies in current practice, such as recognizing inflows of resources and receivables related to some grants. Also, the Board believes that it is the application of the recognition method “when payments are due” for long-term transactions that is most significant in maintaining a relationship with budgetary reporting.
Terminology
B38. Prior authoritative guidance used the term general long-term liabilities to refer to liabilities recognized in the government-wide statement of net position that are not recognized as liabilities in the governmental funds balance sheet. This Statement continues the use of that terminology.
Basis of Accounting
B39. The Board determined that recognition guidance should explicitly acknowledge the use of a basis of accounting in conjunction with the application of a measurement focus. In prior due process documents, the basis of accounting was incorporated only implicitly. Therefore, this Statement references the combined phrase short-term financial resources measurement focus and accrual basis of accounting. Prior guidance for governmental funds used the term current financial resources measurement focus and modified accrual basis of accounting. Because that guidance was not conceptually based, significant modifications to the accrual basis of accounting were needed, and, therefore, the term modified accrual basis of accounting was appropriate in those circumstances. The distinction between the short-term financial resources measurement focus and the economic resources measurement focus is established by the provisions in paragraphs 12–18 of this Statement, and, therefore, the Board determined that the term accrual basis of accounting is appropriate when used in the context of the short-term financial resources measurement focus.
Application of the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting in Governmental Funds
Messages conveyed by governmental fund financial statements
B40. The Board believes that financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting report financial balance sheet elements and flows of financial resources of governmental fund activities from a short-term perspective that can be consistently applied by governments. Financial statements presented applying this measurement focus and basis of accounting report (a) balances from short-term transactions and other events accumulated at period-end and (b) inflows and outflows of resources from short-term transactions and other events as they occur and from long-term transactions and other events when payments are due.
B41. The Board believes that financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting enable assessment of the amount of fund balance at period-end that is available for spending in the next period, which may or may not be restricted for specific purposes, as well as fund balance that is legally or contractually required to be maintained intact, in the context of a consistent and conceptually sound model from a short-term perspective. Furthermore, because this measurement focus and basis of accounting presents a shorter time perspective and recognizes items of a long-term nature when payments are due, the Board believes that it will provide financial results that may be useful in evaluating budgetary information, which usually relates to shorter periods as well.
Features of the measurement focus and basis of accounting
Relationship with budgetary information
B42. The significance of governmental fund budgets is an important factor that distinguishes governments from the private sector. Budgets are integral to managing a government; however, not all governments take the same approach to budgeting. Consequently, the Board believes that comparisons of budgetary information to financial statement information applying a measurement focus and basis of accounting that is more comparable among governments may aid in identifying differences in budgetary practices and, therefore, provide information useful in understanding a government’s budgetary practices. The short-term financial resources measurement focus and accrual basis of accounting is applied using the existing fund reporting structure, which generally is consistent with the budgetary presentations of many governments. Additionally, this measurement focus and basis of accounting provides a measure of fund balance that enables an assessment of the amount of short-term financial resources fund balance at period-end that is available for spending in the subsequent period. The Board believes that information in the resource flows statement also may be valuable in evaluating a government’s budgetary results because the outflows of resources and inflows of resources recognize flows from long-term transactions and other events when payments are due, similar to how many governments budget.
Conceptual consistency
B43. The Board believes that the short-term financial resources measurement focus and accrual basis of accounting provides conceptually consistent recognition principles for governmental fund financial statements, replacing the previous collection of accounting conventions. The balances associated with long-term transactions and other events, such as loans receivable, will be recognized in a consistent manner in the governmental fund financial statements with the exception of long-term debt issued for short-term purposes discussed in paragraph B44. Furthermore, the Board believes that this measurement focus and basis of accounting provides a foundation for developing guidance for governmental funds to report the effects of more complex transactions and other events. As previously noted, transactions involving derivative instruments and other complex transactions and events for which guidance is not currently provided can be addressed using those recognition principles.
B44. The Board determined that an exception to the concepts should be included for circumstances in which a government engages in borrowing for short-term purposes using contractual terms that extend beyond one year. A tax anticipation note with a 15-month maturity is an example of the type of debt that meets the exception. The Board anticipates that this potential exception would not apply in many circumstances. In most cases, governments borrow for short-term purposes using short-term repayment terms. The potential exception results in long-term borrowings issued for short-term purposes being short-term transactions and therefore reported as governmental fund liabilities when the transactions occur, thereby reducing fund balance. The Board believes that fund balance would be overstated if those borrowings are not reported as such and that comparability between governments would be compromised.
Consistent application
B45. The short-term financial resources measurement focus and accrual basis of accounting uses a broad definition of financial assets that includes assets expected to be consumed in lieu of cash. It replaces prior guidance that allowed governments alternative ways to account for certain assets, such as inventory. This measurement focus and basis of accounting also uses a recognition window of one year from the inception to the conclusion of the transaction or other event in distinguishing short-term and long-term transactions and other events, which is fundamental to the measurement focus and basis of accounting. The Board believes that those features enhance the ability of the measurement focus and basis of accounting to be applied consistently from one government to another.
B46. The Board concluded that the assessment of whether a transaction or other event is short term or long term should depend on the amount of time that lapses between the inception of the transaction or relevant component part thereof or other event and the conclusion of the transaction or relevant component part thereof or other event. If that time period is one year or less, the transaction or other event would be identified as short term. If the time period is more than one year, the transaction or other event would be identified as long term. The Board believes that a transaction can require only a single action by each party or multiple actions by a party or more than one party and that each action or combination of related actions may result in a component part. The component parts are determined by the relationship of the required actions of both parties in a binding arrangement. In reaching that conclusion, the Board considered an example of a transaction with a single action required by one party and multiple actions by the other party—a loan document. The Board believes that the lender’s single action is completed when they fund the loan and the borrower completes their required actions by making multiple principal and interest payments. The Board also considered an example of a transaction with single actions required by both parties—a sale of taxable merchandise in a jurisdiction that has established a sales tax. The Board believes the taxpayer is required to pay the sales tax and the government is entitled to the inflow of resources from the sales tax.
Reflects a government’s unique circumstances
B47. The short-term financial resources measurement focus and accrual basis of accounting recognizes elements of financial statements using the specific terms of a government’s binding arrangements (or estimated payments when either there is no binding arrangement or the binding arrangement does not have specific payment terms). As previously noted, past guidance required the recognition of specific liabilities to the extent that they are normally expected to be liquidated with expendable available financial resources based on how governments generally operate. Consequently, the Board concluded that when governments engage in transactions that differ from what is normal for governments in general, the financial statements will appropriately reflect those differences.
Binding arrangements
B48. The guidance for the short-term financial resources measurement focus and accrual basis of accounting identifies the terms of the binding arrangement (or estimated payments if there is no binding arrangement or if the binding arrangement does not have specific payment terms) as the source for information to determine whether a transaction or other event is short term or long term. As noted in paragraph 15 of this Statement, binding arrangements can be written, oral, or implied by the government’s existing practices. An example of an implied binding arrangement is an arrangement under which an employee of a public works department purchases fuel for a department vehicle at a service station. Without use of written or oral means, the service station offers to sell fuel at the price specified on the pump by making the fuel pump available for use, and the employee, as an agent of the government, accepts the terms of that arrangement by filling the tank of the department vehicle with fuel.
Relationship with the objectives of financial reporting
B49. The objectives of financial reporting set forth in Concepts Statement 1 are multi-faceted and can be achieved only through a variety of financial statements and other communication methods. Governmental fund financial statements are expected to achieve certain objectives of financial reporting and contribute to the achievement of other objectives. The Board believes that governmental fund financial statements applying the short-term financial resources measurement focus and accrual basis of accounting (a) assist in fulfilling a government’s duty to be publicly accountable and enable users to assess that accountability (fiscal accountability), (b) assist with demonstrating whether resources were obtained and used in accordance with the entity’s legally adopted budget, and, most importantly, (c) provide information about sources and uses of financial resources. The governmental fund financial statements are the only source for information about sources and uses of financial resources. The Board also believes that the short-term financial resources measurement focus and accrual basis of accounting, in conjunction with the government-wide financial statements, provides information to determine whether current-year revenues were sufficient to pay for current-year services and whether the government’s financial position improved or deteriorated as a result of the year’s operations. Additional information about current-year revenues and costs of current-year services, as well as financial position from a longer term perspective, is provided by the government-wide financial statements.
On-behalf payments for fringe benefits and salaries and direct vendor financings
B50. The short-term financial resources measurement focus and accrual basis of accounting includes on-behalf payments for fringe benefits and salaries as both inflows of resources and outflows of resources. The Board believes that a government’s reporting of inflows of resources and outflows of resources is incomplete, and thus potentially misleading, if the resources from another organization that paid for certain fringe benefits or salaries and the amounts of those fringe benefits or salaries are not recognized in the financial statements prepared using the short-term financial resources measurement focus and accrual basis of accounting.
B51. The Board also believes that a direct vendor financing of the acquisition of a nonfinancial asset, such as a financed purchase of capital assets or a lease arrangement that is a long-term transaction, is a financing and an acquisition of a nonfinancial asset and therefore concluded that the flows related to those transactions should be recognized in the same manner as other transactions in financial statements prepared using the short-term financial resources measurement focus and accrual basis of accounting, even when cash is not exchanged. Therefore, to provide a government’s reporting of inflows of resources and outflows of resources that is complete, and not potentially misleading, this Statement requires an inflow of resources for the amount borrowed in a direct vendor financing and an outflow of resources for the acquisition of a nonfinancial asset to be recognized in the period in which the nonfinancial asset is acquired.
Governmental Fund Financial Statement Titles
B52. The Board believes that the titles of the governmental fund financial statements required by this Statement will be effective in communicating that there are differences between the governmental fund financial statements and the governmental activities in the government-wide financial statements.
B53. Some respondents to the Preliminary Views, user forum participants, and field test participants did not support the governmental fund financial statement titles because they believe the titles were too lengthy and cumbersome. The Board acknowledged that the financial statement titles are longer than what has been used in practice. However, the Board believes that requiring the use of different governmental fund financial statement titles more clearly conveys that there are recognition differences between the statements prepared using the short-term financial resources measurement focus and accrual basis of accounting and the statements previously prepared using the current financial resources measurement focus and modified accrual basis of accounting. The Board believes that the importance of highlighting those differences outweighs the concerns related to the length of the titles. The Board’s decision to require the short-term financial resources measurement focus and accrual basis of accounting highlights the importance of identifying differences between the measurement focuses and bases of accounting, within the context of the measurement focus, of the governmental fund and government-wide financial statements. The Board believes those differences are appropriately highlighted by the changes in the statement titles.
Format of the Resource Flows Statement
B54. The Board considered several alternative formats for the resource flows statement, including retaining the previous format with limited modifications. However, the Board concluded that the current and noncurrent activity format provides the most valuable information to users. Some user forum participants specifically stated that the format would increase the usefulness of the financial statement and the understandability of the flows by highlighting certain transactions. Furthermore, the Board believes that the current and noncurrent activity format will clarify and enhance the statement because it provides information related to outflows of activities at the fund level, excluding transactions related to capital assets and long-term financing.
B55. Some respondents to the Preliminary Views who supported the format overall nevertheless expressed concerns about determining how to classify transfers in and transfers out as current or noncurrent activities. Field test participants also stated that determining whether certain transactions, including transfers in and transfers out, were current or noncurrent activities was somewhat challenging. Some field test participants stated that the presentation was difficult to prepare and reconcile because certain transactions have multiple components, including both current and noncurrent activities. After considering those concerns and other feedback, the Board determined that separating transfers in and transfers out between current and noncurrent activities provides greater detail about those activities on the face of the financial statements. The Board believes that this would be true for other types of transactions and events as well.
B56. Some respondents to the Preliminary Views stated that the terms current and noncurrent may result in users misinterpreting the resource flows statement. Those respondents believe that current is widely recognized as referring to assets or liabilities that are expected to be received as cash, used up, or paid within one year of the financial statement date. The Board believes that this Statement appropriately describes noncurrent as referring to capital asset and long-term debt activity. The Board concluded that all other transactions and events should be considered current for the purposes of classification in this resource flows statement. Some respondents also recommended that the noncurrent activity section be described for what it represents (for example, debt and capital activities). However, as discussed above, this Statement provides a clear description of what would be considered a noncurrent activity. As a result, the Board does not believe that there is a compelling reason to rename the noncurrent activity section.
Governmental Fund Captions
B57. Some respondents to the Preliminary Views did not support the proposed captions, “short-term assets,” “deferred outflows of short-term financial resources,” “short-term liabilities,” “deferred inflows of short-term financial resources,” “short-term financial resources fund balances,” “inflows of short-term financial resources for current activities,” “outflows of short-term financial resources for current activities,” and “net flows of short-term financial resources for noncurrent activities.” Those respondents believed that the proposed captions were too lengthy and cumbersome. Some of the respondents stated that the repetitive use of short-term detracts from the understandability of the financial statements. Similar concerns were expressed by some user forum participants and some field test participants.
B58. The Board acknowledged the concerns of those stakeholders related to the length of the proposed captions and the repetitive use of short-term. The intention of proposing new captions was to more clearly emphasize the recognition differences between the elements in the governmental fund financial statements and the elements in the government-wide financial statements. However, based on issues raised by stakeholders that were discussed previously, the Board determined that changing the financial statement titles adequately emphasized those differences and that changing the captions was unnecessary.
B59. Some respondents to the Preliminary Views also expressed concerns with changing revenues and expenditures to inflows of resources and outflows of resources, respectively. The Board acknowledges that the revenues and expenditures terminology is more familiar to stakeholders. However, the Board believes that the use of inflows of resources and outflows of resources is needed to distinguish those elements in the governmental fund financial statements from those in the government-wide financial statements. Use of the identical term revenues within both governmental fund financial statements and government-wide financial statements is not appropriate because the amounts recognized are different for items arising from long-term transactions and other events. With the change from revenues to inflows of resources, the Board concluded that it also was appropriate to amend Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, to change the governmental fund type special revenue funds to special resources funds.
Additional Explanations
B60. The Preliminary Views proposed including an additional explanation at the top of the governmental fund financial statements that the statements present a short-term view and report items of a long-term nature differently from the government-wide financial statements. After consideration of the feedback on the Preliminary Views discussed above, the Board concluded that the additional explanation is not necessary. The Board believes the financial statement titles and the labels in the resource flows statement are sufficient to accentuate the recognition differences.
Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position
B61. Outreach conducted during the development of the Preliminary Views provided stakeholder feedback on the separate presentation of operating and nonoperating revenues and expenses in the proprietary fund statement of revenues, expenses, and changes in fund net position. Those stakeholders generally believe separating operating and nonoperating revenues and expenses results in information that is valuable for (a) identifying whether an activity’s operating revenues covered its operating costs and (b) providing useful indicators for the evaluation of management. Some of those stakeholders raised concerns that inconsistency in determining how to classify items as operating or nonoperating is an impediment to the usefulness of the presentation. The Board concluded that governments should use a specific definition for operating revenues and expenses and a specific description of nonoperating revenues and expenses when presenting the financial statements of proprietary funds rather than continuing to use their individual accounting policies, which may differ. The alternative of establishing definitions for operating revenues and expenses on an industry-by-industry basis was considered; however, the Board decided that using the term operating to mean different things in the financial statements of different types of governments would create more confusion than clarity. The Board also concluded that the transactions classified as operating revenues and expenses should be consistent with the classifications of those transactions in the statement of cash flows.
B62. During the outreach described in the preceding paragraph, several approaches to defining operating activities were suggested, including:
  1. A self-sustaining or subsidized approach, which may be useful for identifying whether the activity reported is self-supporting or whether other resources, such as subsidies, are needed to maintain the level of service provided
  2. A financial performance approach, which may be useful for evaluating management or to assess the financial health of an activity
  3. A recurring and nonrecurring approach, which may be useful for differentiating transactions that are of an ongoing nature from those that are not
  4. A debt covenants approach, which may be useful for assessing compliance with debt covenants.
The Board concluded that the self-sustaining or subsidized approach would provide the most consistent and useful message in proprietary fund financial statements. The Board believes the financial performance approach would present challenges because it does not have a consistent meaning to stakeholders and likely would result in measures that are not comparable from one government to another. The Board concluded that the recurring and nonrecurring approach would not be feasible because of the difficulties in developing guidance for what is considered recurring and nonrecurring that can be applied consistently. Finally, the Board concluded that the debt covenants approach would present challenges related to comparability, even within the government when there are conflicting debt covenants, and also would raise issues regarding usefulness to all stakeholders.
B63. The approach to determining what is operating and nonoperating was designed to capture all revenues and expenses. To ensure that no type of revenue or expense would be omitted from consideration, the Board decided to describe one term and then define the other term as all transactions not included in the description of the first term. The Board determined that it was most feasible to describe those items that should be considered nonoperating. Items that are not included in the description of nonoperating revenues and expenses (for example, rental revenues from excess land and sales of inventory in the ordinary course of the business activity) would be considered operating revenues. The Board believes that the definition of operating revenues and expenses and the description of nonoperating revenues and expenses are consistent with the guidance for determining operating, noncapital financing, capital and related financing, and investing activities in Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities That Use Proprietary Fund Accounting.   The cash flows to be presented in the other three classifications are specifically identified; all other cash flows are classified as operating activities. The Board concluded that the definition of operating revenues and expenses and the description of nonoperating revenues and expenses in this Statement would eliminate inconsistencies in classifying operating revenues and expenses and the need for a government to establish a policy that defines operating revenues and expenses as previously required by paragraph 102 of Statement 34.
B64. In the feedback on the Preliminary Views related to defining operating revenues and expenses and describing nonoperating revenues and expenses, stakeholders associated with proprietary funds that receive subsidies on a regular basis expressed a preference for a financial performance approach. As previously noted, the Board does not believe it is feasible to define operating activities using a financial performance approach because the transactions and other events that compose the operating income subtotal should be uniform across all proprietary funds. However, the Board recognizes the concern of some stakeholders that operating income (loss) presented applying the definition in paragraph 31 of this Statement may present an incomplete portrayal of the financial health of some entities. The Board concluded that the presentation of a subtotal that includes noncapital subsidies was needed to be (a) informative with respect to proprietary funds that receive subsidies on a regular basis and (b) closer to a financial performance measure than the existing subtotal for operating income (loss), which conveys whether an entity is self-supporting or subsidized. Additionally, some stakeholders questioned whether the approach for defining operating revenues and expenses and describing nonoperating revenues and expenses should be consistent with the existing recognition classifications of exchange and nonexchange transactions. The Board believes that an approach consistent with recognition classifications would not provide as valuable information for users as the self-sustaining or subsidized approach.
B65. GASB literature has not previously defined subsidies, although the term has been used in several contexts to describe the use of subsidies and to identify certain types of transactions as subsidies. The Board concluded that the definition captures the essential feature of a subsidy—that of keeping rates lower than they otherwise would be. Exhibit 8 in Appendix D of this Statement provides a nonauthoritative example of how the financial statement should present subsidies.
Information about Major Component Units in Basic Financial Statements
B66. Previous guidance provided that major component unit information may be presented using more than one method of communication. Those requirements allowed presentation of major component units by (a) presenting each major component unit in a separate column in the reporting entity’s statements of net position and activities, (b) including combining statements of major component units in the reporting entity’s financial statements after the fund financial statements, or (c) presenting condensed financial statements in the notes to the reporting entity’s financial statements. Concepts Statement 3 clarifies the relationships between basic financial statements, notes to basic financial statements, and supporting information presented with basic financial statements within the framework of general purpose external financial reporting. It establishes a hierarchy that provides a conceptual basis for selecting the appropriate communication method for each item of information. Based on that hierarchy, the Board concluded that it is conceptually appropriate for major component unit information to be presented using a single method of communication. The Board concluded that major component unit information has characteristics of financial statement information because it represents the effects of transactions and other events.
Therefore, this Statement eliminates the option to report information about major component units in the reporting entity’s notes to financial statements. In addition, the Board determined that information about major component units should be presented as separate columns in the reporting entity’s statement of net position and statement of activities, if it does not reduce their readability. However, the Board acknowledges that some governments may have several major component units. In those circumstances, this Statement requires that combining statements of major component units be presented after the fund financial statements as part of the basic financial statements.
Budgetary Comparison Information
Method of Communication
B67. Based on the hierarchy discussed in paragraph B66, the Board also concluded that it is conceptually appropriate for budgetary comparison information to be presented using a single method of communication. The Board believes that using a single method also will increase comparability between governments reporting budgetary comparison information. Requiring a single communication method eliminates the optional reporting presentations that were allowed in Statement 34.
B68. Concepts Statement 3 states that “RSI has a clear and demonstrable relationship to information in the basic financial statements or notes to basic financial statements. . . .” RSI may include explanations of recognized amounts, analysis of known facts or conditions, or other information essential for placing the basic financial statements and notes to basic financial statements into operational, economic, or historical context. The Board concluded that budgetary comparison information provides operational context (relates financial information to the activities, policies, and nonfinancial resources of a government) as to whether a government obtained and spent resources in accordance with its established budget. Budgetary comparison information also provides operational context by requiring a reconciliation to information presented in the governmental fund resource flows statement.
B69. Concepts Statement 3 also states that items recognized in a financial statement are intended to provide reliable representations of the effects of transactions and other events. Items that meet the definition of a financial statement element and for which the measurement of the item sufficiently reflects the qualitative characteristics of information in financial reporting, subject to the limitation of financial reporting, described in Concepts Statement 1, are recognized. Concepts Statement No. 4, Elements of Financial Statements, established definitions for the seven elements of historically based financial statements. The Board concluded that even though the actual amounts on a budgetary basis meet the criteria for elements of financial statements, budgeted amounts for inflows of resources and outflows of resources do not because they could be considered forecasts of inflows and outflows of resources from underlying transactions and other events that are expected to occur during a period. The Board also acknowledges that if budgetary information is presented in an annual financial report, it is historical information because the reporting period has ended. However, the GASB does not set standards for budgetary measures. As a result, there is no standardized measure for budgetary reporting. Furthermore, the Board concluded that budgetary comparison information would not provide reliable representations of the effects of transactions and other events that are measurable with a sufficient degree of reliability if a government has different budgetary and GAAP measurement focuses and bases of accounting or fund structures.
B70. As a result, the Board concluded that budgetary comparison information is essential for placing the basic financial statements and notes to basic financial statements into context and, therefore, should be reported as RSI and not as a basic financial statement. The Board also noted that the results of the pre-agenda research support that most governments currently report their budgetary comparison information as RSI.
B71. Some Preliminary Views respondents who disagreed with the Board’s view stated that including budgetary comparison information as RSI would reduce the value of budgetary reporting because of the level of audit assurance provided on the information. The Board considered this during its deliberations on budgetary comparison information. The Board reached out to representatives from the audit community and found that budgetary comparison information is subject to audit procedures for compliance regardless of the communication method, even if not at the same level of assurance. Although the Board acknowledged that those auditor stakeholder views may not be representative of past practice, the Board concluded that the value of budgetary comparison information would not be reduced by reporting the information as RSI; that is, the information is required.
Budget Variances
B72. The consideration of requirements related to the reporting of budget variances is not entirely independent of the consideration of the method of communicating budgetary information. RSI should be reported in accordance with specific requirements to present that information. Optional presentations, such as the current provisions in Statement 34 allowing presentation of final-budget-to-actual variances and budget-to-final-budget variances, are not consistent with the concept of RSI.
B73. The Board concluded that the final-budget-to-actual variance should be required to be presented because it will provide users with the ability to assess the accountability of a government for its resources. The Board believes that this variance is important because it demonstrates whether resources were obtained and used in accordance with the government’s legally adopted budget. Furthermore, the Board believes that, from a practical standpoint, requiring the final-budget-to-actual variance imposes a minimal burden on governments because many governments currently present the final-budget-to-actual variance in their budgetary comparison schedule, as shown in the results of the pre-agenda research. Some respondents to the Preliminary Views that agreed that this variance should be required stated that the requirement would impose a minimal burden on governments. Those respondents who disagreed with providing the variance did so in the context of the Board’s proposal to also include the variance between the original and final budget amounts.
B74. The Board also concluded that the original-budget-to-final-budget variance should be required to be presented in a budgetary comparison schedule because it provides a different analytical dimension to the information and increases the usefulness of the budgetary comparison. The Board believes that variance provides information to users to assess accountability that goes beyond a government’s ability to appropriately forecast. For example, highlighting amendments made to the original budget may provide necessary information to users related to uncommon or nonrecurring events that the government experienced during the period. Some respondents to the Preliminary Views specifically disagreed with including the variance because they believe that (a) it does not provide meaningful information, (b) users can easily calculate those variances, and (c) it would overcomplicate or clutter the budgetary comparison schedule, making it more difficult for users to read. The Board was not persuaded by those arguments against including this specific variance because of the usefulness of the information from an accountability perspective.
B75. The Board also considered requiring the presentation of the original-budget-to-actual variance and concluded that, although it informs a different accountability assessment, both the original budget and actual amounts already would be considered in the other two variances.
Potential Improvements Considered but Not Required
Debt Service Fund Information
B76. Pre-agenda research surveys found that debt service fund information is the type of fund information most frequently cited as needed but missing from many major fund financial statement presentations. User interviews identified different presentations of debt service funds that some users believe would provide additional useful information related to debt service funds. Some users preferred that the largest debt service fund be reported as a major fund to obtain information about cash and revenue resources associated with that debt. Other users preferred reporting aggregated debt service funds as a major fund to assess the total debt service for governmental activities. In addition, some users preferred providing additional note disclosures about debt service funds.
B77. After considering the need to provide additional information in financial statements related to debt service funds, the Board decided not to add reporting requirements related to information in debt service funds. The Board believes that requiring debt service funds to be reported as major funds, either individually or in the aggregate, would not be consistent with the decisions made in Statement 34 that the focus of governmental and enterprise fund financial statements should be on major funds. The Board recognizes that different types of users have unique needs that would require specific financial information to meet those needs; however, general purpose external financial reporting cannot meet the needs of every type of user. The Board noted that governments that want to report debt service funds as major funds can do so if they believe that it is particularly important to financial statements users. The Board also noted that much of the information requested related to debt service funds currently is provided in the line item information in the basic financial statements or the notes to those statements. The Board recently evaluated disclosure requirements related to debt during its deliberations that led to Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements.
Schedule of Government-Wide Expenses by Natural Classification
B78. The Preliminary Views included a proposal that a schedule of natural classification of government-wide expenses by function or program for governmental activities and by different identifiable activity for business-type activities be presented as supplementary information by governments that prepare a comprehensive annual financial report. It was noted in the Preliminary Views that a natural classification of government-wide expenses could provide valuable insight into the cost breakdown of each function, program, or identifiable activity.
B79. Although some respondents to the Preliminary Views supported including a schedule of natural classification of government-wide expenses because of the usefulness of the information it would provide, other respondents and some field test participants indicated that there would be significant costs incurred by governments to prepare such information. Because of the concerns as to whether the expected benefits would justify the perceived costs to prepare such information, the Board concluded that a schedule of government-wide expenses by natural classification should not be required.
Statement of Cash Flows
B80. The Board also considered whether a statement of cash flows, either as part of the government-wide or the governmental fund financial statements, should be required to be presented as part of the financial reporting model. The Board decided not to require a statement of cash flows because the expected incremental benefits did not exceed the perceived costs of preparing and auditing that information. The short-term financial resources measurement focus and accrual basis of accounting reports long-term transactions and other events in a manner that encompasses cash flows. In addition, budgetary information of major governmental funds is required to be presented, and many governments budget on a cash or similar-to-cash basis. Therefore, the overall nature of the information that would be provided by a governmental funds statement of cash flows would not be significantly different from that already being presented. The format of the presentation would be different, but the content likely would not. The Board also understands that for many governments—complex governments with a large number of governmental funds and small governments with limited resources—the effort necessary to prepare a governmental fund statement of cash flows could be significant and affect the timeliness of financial reports.
Small Government Considerations
B81. The Board considered all the improvements within the context of small governments to determine whether there were opportunities for practical concessions without undermining the fundamentals of the model. The major changes to the existing reporting model relate to:
  1. MD&A
  2. Unusual or infrequent items
  3. Presentation of governmental fund financial statements
  4. Application of the short-term financial resources measurement focus and accrual basis of accounting in governmental funds
  5. Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position
  6. Information about major component units in basic financial statements
  7. Budgetary comparison information.
B82. The Board believes that the improvements related to MD&A either move existing requirements to other sections of the financial report or provide clarification and emphasis of requirements that existed in Statement 34, which will assist governments of all sizes. Presenting the analysis of budgetary variances in RSI with the presentation of the variances themselves (budgetary comparison information) does not require governments, including small governments, to report any information that they are not already reporting. The Board considered providing small governments with a practical concession by not requiring the reporting of a discussion of budget variances at all. However, based on the value placed on this information by stakeholders in the pre-agenda research, especially by small governments, the Board concluded that providing an analysis of budget variances would be appropriate for all governments. Furthermore, the Board concluded that eliminating the discussion of the modified approach from MD&A is not likely to be applicable to small governments because few of them report infrastructure assets using the modified approach.
B83. Statement 34 requires that MD&A include an analysis of why the measurements and results reported in the financial statements have changed rather than just presenting the amounts and percentages of changes. However, the pre-agenda research, which included governments of all sizes, provided evidence that the related guidance in Statement 34 may not be sufficiently clear. The level of detail of the condensed financial statements from the government-wide financial statements, in which many individual accounts may be aggregated in a single line item, leads some preparers to identify the accounts aggregated within the line item as the source of a year-to-year change, rather than explaining the reasons why the amounts reported for those individual aggregated accounts changed from year to year. As a result, the Board believes that clarifying the relationship of the financial statements to each other and emphasizing the focus on the detailed analysis will benefit all governments, regardless of their size. The Board concluded that providing clearer guidance on how to discuss those relationships and reasons for changes in MD&A, which will increase the consistency and comparability in how this information is reported, benefits all governments.
B84. Furthermore, the pre-agenda research revealed that some preparers from governments of all sizes are describing only those facts, decisions, or conditions in MD&A that are specifically illustrated in the GASB’s nonauthoritative guidance. Users participating in the pre-agenda research ranked the description of currently known facts, decisions, or conditions as the component of MD&A that is most useful. The users also identified additional information that would be valuable to them if discussed in this section of MD&A. In many cases, that additional information would meet the existing requirements in Statement 34, if applicable, but some governments were not presenting that additional information within this section of MD&A. Preparers and auditors identified additional types of information that would be useful in understanding a government’s health and that were similar to those identified by users. As a result, the Board determined that including examples of specific types of information that should be included in this component of MD&A will clarify the existing requirement for governments of all sizes and expand the discussions provided. Furthermore, consistency and comparability in how this information is reported will be improved.
B85. The Board does not believe that unusual or infrequent items are a pervasive issue for small governments. In practice, identifying whether an item is unusual in nature or infrequent in occurrence or both is challenging for all governments, especially those that are small in size. The Board determined that not focusing on the distinctions of whether the item is unusual or infrequent or both and of whether the item is within the control of management will clarify and simplify reporting for all governments.
B86. The Board determined that presenting the governmental funds resource flows statement using a current and noncurrent activity format would not be onerous or complex for small governments, as it would require only a relocation of various line items. Likewise, the Board does not believe that changing statement titles and captions would be difficult. Once the changes are made in the first year of implementation, governments will have a template that can be used again.
B87. The Board believes that the short-term financial resources measurement focus and accrual basis of accounting establishes a sound conceptual basis for recognition of transactions in governmental fund financial statements, which will assist governments of all sizes by providing clearer guidance. The requirement associated with the short-term financial resources measurement focus and accrual basis of accounting will increase the consistency of governmental fund information. If a separate measurement focus and basis of accounting were established for small governments, it would conflict with the Board’s objectives of financial reporting. Concepts Statements provide the framework within which the GASB develops standards of financial reporting for all governmental entities. As a result, the Board believes that the requirements related to the measurement focus and basis of accounting for governmental fund financial statements do not provide an opportunity to allow for practical concessions for small governments.
B88. The Board believes that defining proprietary fund operating revenues and expenses and describing nonoperating revenues and expenses (including defining subsidies) in the proprietary fund resource flows statement will benefit all governments, regardless of their size. Those definitions and that description will assist governments of all sizes by providing clearer guidance on how to classify revenues and expenses, which will increase the consistency and comparability of that information.
B89. The pre-agenda research showed that most governments (of all sizes) already include the budgetary comparison information as RSI and report a variance column. Furthermore, as discussed previously, the Board does not believe that it would be appropriate to establish separate conceptual frameworks based on government size. As a result, the Board concluded that a single method of communicating major component unit information is appropriate and that the information has characteristics of financial statements because it provides representations of the effects of transactions and other events for governments of all sizes.
B90. The Board acknowledges that there are differences in resources (human or financial) potentially available for implementation within small governments. As a result, the Board concluded that providing an additional year for implementation for small governments (those with total revenues less than $75 million) would enable them to benefit from the report preparation and audit experiences of larger governments that will have implemented earlier. Capitalizing on a “learning curve” in this way could benefit the governments in the second implementation group and could provide for a smoother transition, which ultimately should benefit users as well.
Considerations Related to Benefits and Costs
B91. The overall objective of financial reporting by state and local governments is to provide information to assist users (the citizenry, legislative and oversight bodies, and investors and creditors) in assessing the accountability of governments and in making economic, social, and political decisions. One of the principles guiding the Board’s setting of standards for financial reporting is the assessment of the expected benefits and perceived costs. The Board strives to determine that its standards (including disclosure requirements) address a significant user need and that the costs incurred through the application of its standards, compared with possible alternatives, are justified when compared to the expected overall public benefit.
B92. Present and potential users are the primary beneficiaries of improvements in financial reporting. Persons within governments who are responsible for keeping accounting records and preparing financial statements, as well as managers of public services, also benefit from the information that is collected and reported in accordance with GASB standards. The costs to implement the standards are borne primarily by governments and, by extension, their citizens and taxpayers. Users also incur costs associated with the time and effort required to obtain and analyze new information to meaningfully inform their assessments and decisions.
B93. The Board’s assessment of the expected benefits and perceived costs of issuing new standards is unavoidably more qualitative than quantitative because no reliable and objective method has been identified for quantifying the value of improved information in financial statements. Furthermore, it is difficult to accurately measure the costs of implementing new standards until implementation has taken place. Nonetheless, the Board undertakes the assessment based on the available evidence regarding expected benefits and perceived costs with the objective of achieving an appropriate balance between maximizing benefits and minimizing costs.
MD&A
B94. The changes to the MD&A requirements are expected to benefit users by discouraging the inclusion of boilerplate and duplicative information in MD&A, which will improve the quality of the analysis of changes from the prior year presented by governments and provide greater clarity regarding what items should be presented as currently known facts, decisions, or conditions. Those changes also are expected to benefit preparers and auditors by further clarifying what information should be presented in MD&A. The Board believes that the costs associated with those changes would be minimal because the types of information to be presented in MD&A have been clarified, not significantly modified.
Unusual or Infrequent Items
B95. The requirement to separately present unusual or infrequent items, rather than special and extraordinary items, in the resource flows statement, retains the benefit to users of identifying transactions that may affect their analysis of trends and will provide additional information regarding the program or identifiable activities of the item. The requirements are expected to benefit preparers and auditors by simplifying their efforts to identify items that are required to be presented separately. Preparers and auditors no longer need to assess whether an item is either unusual in nature or infrequent in occurrence or both to determine whether the item should be presented as an extraordinary item or a special item. The Board does not anticipate that the requirements will be costly to governments because (a) preparers and auditors already are familiar with evaluating transactions based on the criteria of unusual in nature and infrequent in occurrence from existing guidance and (b) relatively few governments report items of this nature.
Presentation of Governmental Fund Financial Statements
B96. The Board believes that the requirements related to the presentation of governmental fund financial statements will benefit users by providing more valuable information that uniformly disaggregates short-term financial resource flows related to capital assets and long-term debt (including transfers, as applicable) from flows related to current activities. Furthermore, the requirement is not expected to be costly to implement because the distinction between a current activity and a noncurrent activity is expected to be straightforward in most cases. Transfers may be less straightforward to classify; however, the existing requirements to disclose the principal purposes of interfund transfers (in Statement No. 38, Certain Financial Statement Note Disclosures) should provide sufficient information for the classification in the governmental fund financial statements.
Application of the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting in Governmental Funds
B97. Users will benefit from the application of the short-term financial resources measurement focus and accrual basis of accounting in governmental fund financial statements because the information presented will have conceptual consistency. Because governments will apply the same recognition period and transactions will be recognized in accordance with the terms of the binding arrangement (or expected payment if the binding arrangement does not specify terms or if there is no binding arrangement), information provided in the governmental fund financial statements will be more consistent and will reflect the potentially unique terms of a government’s transactions.
B98. The Board recognizes that both auditors and preparers will incur costs to implement the application of the short-term financial resources measurement focus and accrual basis of accounting in governmental fund financial statements, primarily in the assessment of whether a transaction is short term or long term. The Board expects that the information currently used by a government to convert the transactions recorded on a day-to-day basis into the information necessary to prepare the government-wide financial statements will provide relevant information for the assessment of whether a transaction is short term or long term. Based on feedback from the field test participants, the Board anticipates that the cost of implementation, including both staff and nonstaff costs, will occur primarily prior to and during the year of implementation.
Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position
B99. The requirements related to the presentation of proprietary fund financial statements are expected to benefit users in several ways. The Board believes that the definition of operating revenues and expenses and the description of nonoperating revenues and expenses, including the definition of a subsidy, will result in information that is more relevant being presented in the statement of revenues, expenses, and changes in fund net position. The definition and description also will increase the comparability of that information because all governments will apply the same definition and description. The inclusion of a subtotal for operating income (loss) and noncapital subsidies provides value because it is a more representative performance measure than the subtotal for operating income (loss) is, it indicates sustainability, and it is useful for analysis and benchmarking. Preparers and auditors are expected to benefit from this guidance because they will be applying a uniform set of definitions rather than government-specific definitions. The definition of operating revenues and expenses and the description of nonoperating revenues and expenses are consistent with the classification of related cash flows in the statement of cash flows and, therefore, application is not anticipated to be challenging. The definition of a subsidy is new guidance and, as a result, the Board believes that the application may be more challenging. Based on the feedback received as part of the field test, the Board believes that the perceived costs to preparers would be primarily in the years prior to and in the year of implementation to reassess the classification of revenues and expenses and to reformat the statement. Furthermore, the Board determined that the requirement to reflect the classifications in the proprietary fund statement of revenues, expenses, and changes in fund net position in financial trends in the statistical section may be applied on a prospective basis to minimize the cost of implementing these provisions.
Information about Major Component Units in Basic Financial Statements
B100. The Board believes that the requirement related to the presentation of major component unit information will benefit users by improving their ability to locate the information because the alternatives for presentation have been reduced. Furthermore, costs associated with the requirement are expected to be limited to minor reformatting because for most governments, it is the location of the information that may change, not the information itself.
Budgetary Comparison Information
B101. The requirements related to the presentation of budgetary comparison information are expected to benefit users by (a) communicating the information using a single communication method and (b) enhancing its usefulness by requiring presentation of both the original-budget-to-final-budget variance and the final-budget-to-actual variance. Additionally, the requirement to relocate the analysis of significant variances from MD&A to notes to RSI is expected to benefit users’ ability to assess accountability. The Board believes that the expected costs of these requirements will be minimal because (1) they change only the location of existing information (the budgetary comparison information and analysis of significant variances) and (2) the addition of variance columns is expected to be a minor modification to the existing presentation requirement.
Overall Conclusion Regarding Benefits and Costs
B102. Considering (a) the aforementioned expected benefits of the provisions of this Statement related to MD&A, unusual or infrequent items, presentation of governmental fund financial statements, application of the short-term financial resources measurement focus and accrual basis of accounting in governmental fund financial statements, presentation of proprietary fund financial statements, major component unit information, and presentation of budgetary comparison information and (b) the previously discussed perceived costs associated with those provisions, the Board believes that the expected benefits that will result from the information provided through implementation of this Statement are significant and justify the perceived costs of implementation and ongoing compliance.
Effective Date and Transition
B103. As previously noted, the Board believes that there are differences in resources (human and financial) potentially available for implementation for certain governments and that a later effective date for governments with total annual revenues of less than $75 million would enable them to benefit from the report preparation and audit experiences of governments that will have implemented earlier. Again, as noted earlier, capitalizing on those expected benefits could allow for a smoother transition in implementing the provisions of this Statement.
B104. The Board concluded that $75 million was an appropriate threshold to distinguish governments that would benefit from additional time to implement the provisions of this Statement. After considering summarized data by government type from the most recent Census of Governments performed by the United States Census Bureau, the Board established a threshold that would allow a sufficient number of governments of each type and by state to implement in the first group. Although that threshold is not consistent with the thresholds used in Statement 34, the Board determined that it would exclude the majority of governments that currently produce GAAP financial statements. As a result, the Board concluded that there would be a sufficient number of governments with total revenues of $75 million or more by government type to allow for governments with total revenues of less than $75 million to learn from those implementation experiences.
B105. The Board decided that total revenues should include only the revenues of the primary government’s governmental activities and business-type activities, with the exception of revenue-related extraordinary and special items, classifications that are eliminated with the implementation of this Statement. The Board determined that revenue-related extraordinary and special items should not be included in the calculation of total revenues as those types of transactions could result in requiring a government to implement this Statement at an earlier date.
B106. The Board recognizes that a primary government’s component units may not have total revenues that would require the same implementation period as the primary government. However, the Board is concerned that the information provided to users would not be consistent between the primary government and some component units in a reporting entity if the primary government implemented the provisions of this Statement earlier than some component units in the same reporting entity. Therefore, the Board determined that all governments in the same reporting entity should implement the provisions of this Statement when the primary government is required to implement.
B107. When discussing the effective date provisions, the Board considered the challenges being faced by stakeholders as a result of the COVID-19 pandemic. The Board believes that the effective dates of reporting periods beginning after June 15, 2024 (governments with total annual revenues of $75 million or more) and reporting periods beginning after June 15, 2025 (governments with total annual revenues of less than $75 million) is sufficient because of the time available between the issuance and the effective date of this Statement.
B108. The provisions of this Statement should be applied retroactively by restating financial statements, if practicable, for all prior periods presented. The phrase if practicable has been used in other GASB standards in a similar context as used in this Statement with respect to transition provisions that require restating the financial statements for all prior periods presented. The Board believes that reasonable efforts should be employed before a government determines that restatement of all prior periods presented is not practicable. In other words, inconvenient should not be considered equivalent to not practicable.
Alternative View
B109. One Board member expresses an alternative view to this Statement for three primary reasons:
  • The Statement continues the movement of governmental fund accounting and reporting away from budgetary accounting and reporting.
  • Owing to a serious conceptual flaw, it facilitates no significant operational decisions or evaluative judgments.
  • It fails to address the most significant limitations of the current financial accounting and reporting model.
Moving Fund Accounting Further from Budgetary Accounting
B110. The Board member that expresses the alternative view objects to this Statement because it further severs governmental fund accounting and reporting from their budgetary counterparts. In that member’s opinion, it thereby undermines the very rationale for the presentation of governmental fund financial statements.
B111. The importance of linking a government’s financial statements to its legally adopted budget has long been recognized. NCGA Statement 1, Governmental Accounting and Financial Reporting Principles, issued in 1979, stated that “ideally, the basis upon which the budget is prepared should be consistent with the basis of accounting utilized. . . .” It also promulgated a current financial resources measurement focus and a modified accrual basis of accounting that were similar, if not necessarily identical, to those of the governmental fund budgets of most state and local governments.
B112. The GASB, in Concepts Statement 1, issued in 1987, recognized that “many believe the budget is the most significant financial document produced by a governmental entity.” Affirming the primacy of the budget, it established the following as an objective of financial reporting:
Financial reporting should demonstrate whether financial resources were obtained and used in accordance with the entity’s legally adopted budget; it should also demonstrate compliance with other finance-related legal or contractual requirements. [Original footnote reference omitted.]
B113. Then, in 1999, Statement 34 operationalized that objective by prescribing a continuation of the current financial resources measurement focus and modified accrual basis of accounting. The Board observed that there might be virtue in requiring that each government prepare its governmental fund financial statements on its own unique budgetary basis (in many cases a near-cash basis) rather than a common basis. However, in the absence of uniform standards for budgets, it contended in Statement 34 that such a directive would diminish comparability among governments. Nevertheless, the Board emphasized that the focus on current financial resources is intended to maintain the close ties between budgeting and financial reporting.
B114. Financial statement users have consistently voiced support for a budget-oriented measurement focus and basis of accounting. In Statement 34, the Board supported its current financial resources model by citing its own research studies of 1985 and 1990, various independent academic studies, and respondents’ comments to several of its due process documents.
B115. The GASB asserted in Concepts Statement 1 that financial reporting should not only demonstrate budgetary compliance but also should indicate the extent to which interperiod equity has been achieved. That is, “financial reporting should provide information to determine whether current-year revenues were sufficient to pay for current-year services.”
This objective, however, can be realized only with financial statements that take a long-term recognition approach. As addressed in a subsequent section of this alternative view, persuasive arguments can be made that governmental fund financial statements should be reported using a full accrual basis of accounting, or some comparable basis, that encompasses noncurrent, as well as current, resources.
B116. The short-term financial resources measurement focus and accrual basis of accounting is, in essence, a compromise between a budget-based model that focuses on a narrow range of resources and a full-accrual model that focuses on a broad range of resources. As such, it fulfills neither of Concepts Statement 1’s salient objectives. It neither demonstrates budgetary compliance nor provides information as to whether current-year revenues were sufficient to pay for current-year services. Accordingly, despite claims of its proponents, the short-term financial resources measurement focus and accrual basis of accounting is inconsistent with the reporting objectives that the Board itself has established.
Facilitates No Significant Operational Decisions or Evaluative Judgments
B117. The Board member that expresses the alternative view believes that a serious conceptual flaw renders the short-term financial resources measurement focus and accrual basis of accounting information devoid of decision utility.
B118. The short-term recognition approach for governmental fund financial statements distinguishes between short-term and long-term assets and liabilities based on the date of the inception of the underlying transaction or other event. Thus, only assets and liabilities that had an initial maturity of one year or less would be reported in governmental fund balance sheets; those with an initial maturity of more than one year, even if due one day after the balance sheet date, would be reported only in government-wide statements of net position. The length of time until maturity as of the balance-sheet date would not be taken into account.
B119. Consider a stylized example that highlights the shortcomings of this approach according to the Board member that expresses the alternative view. Two governments are exactly the same in all respects except that one issued a $10 million, one-year note in January 20X5; the other issued a five-year $10 million note four years earlier in January 20X1. Both notes are due in January 20X6. As of the balance sheet date of December 31, 20X5, both governments are in exactly the same economic position. Both have an obligation of $10 million due in January 20X6. Hence, for both governments, the obligations are due in the short term. Yet, ignoring any other assets and liabilities, the government with the one-year note would report a liability $10 million greater and a fund balance $10 million less than the government with the five-year note.
B120. It is a widely accepted principle of both management accounting and financial economics that sunk costs are irrelevant for decision making. The date that a transaction was initiated is the equivalent of a sunk cost. It matters not when a financial obligation or receivable arose; when it arose is past history and thereby irrelevant. What is relevant is the amount and timing of cash flows—the amount of the obligation or receivable and the date on which the obligation is required to be paid or on which the receivable can be collected.
B121. As is evident from the example, the balance sheet produced from applying the shortterm financial resources measurement focus and accrual basis of accounting could not be relied upon to indicate the amount that is available for spending in the short term. Yet, this is the amount that is most relevant to governmental managers, legislative bodies, bond rating agencies, investors, and citizens. In fact, as a consequence, the Board member that expresses the alternative view has been unable to identify a single significant decision that the resultant balance sheet can be used to facilitate.
B122. Governmental fund financial statements are not intended to be the sole source of information indicative of a government’s fiscal status. For information on long-term resources, users need to look to the government-wide financial statements, notes, and supplementary disclosures. However, while governmental fund financial statements cannot be expected to provide complete information, neither can they be permitted to mislead users of those financial statements. But if the short-term financial resources approach is taken, mislead they will. The Board’s Basis for Conclusions purports that “financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting enable assessment of the amount of fund balance at period-end. . . .” Unfortunately, they do no such thing. They do not enable the assessment of fund balance legally available for appropriation or fund balance available for spending.
B123. The Board member that expresses the alternative view believes that an accounting and reporting model that is at best decision useless, and at worst misleading, is indefensible.
Fails to Address the Most Significant Limitations of the Current Financial Accounting and Reporting Model
B124. The Board member that expresses the alternative view believes that the short-term financial resources measurement focus and accrual basis of accounting fails to address the most pressing drawbacks of the presently employed GASB model: it promotes a short-term fiscal-policy perspective.
B125. Anecdotal and empirical evidence indicate that both government managers and legislators look to governmental funds—primarily the general fund—to inform fiscal decisions. However, because the governmental fund financial statements of the general fund exclude long-term obligations, the Board member that expresses the alternative view believes they obfuscate the government’s true financial condition. They conceal costs and obligations incurred in a current period that will not have to be budgeted for, or reported on, until a future period. For obvious reasons, these budgeting and reporting practices promote policies that transfer fiscal burdens from the present to the future. The consequences are most clearly manifest in the failure of many governments to adequately fund their pension and OPEB plans.
A Possible Alternative Approach That Would Provide Both Budgetary and Long-Term Information
B126. As emphasized above, the Board member that expresses the alternative view recognizes the importance of providing both budget-based and long-term information in governmental fund financial statements. The Board member that expresses the alternative view does not believe, contrary to what has been implied in the Board’s previously issued Invitation to Comment and Preliminary Views documents related to this project, that the Board has to choose between a budgetary and a long-term approach. The Board member that expresses the alternative view believes instead that both approaches can be taken within the same set of governmental fund financial statements.
B127. The Board member that expresses the alternative view believes that the Board should be considering for the general fund (the general fund being the one that is of paramount concern to users), as but one possibility among several, a measurement focus and basis of accounting that would result in a layered statement of activities and a columnar balance sheet. The statement of activities would have three layers. The top layer would report inflows of resources and outflows of resources on the government’s own unique budget basis. These inflows of resources and outflows of resources, when added to the beginning-of-year budgetary fund balance, would result in a “bottom line” indicative of end-of-year budgetary fund balance.
B128. The second layer would be on a standardized basis—a “modified accrual” basis of accounting. This layer, similar to the current financial resources measurement focus and modified accrual basis of accounting, would be governed by specific standards established by the GASB and would be on a “budget-like” basis. As discussed previously, to be of value to users having to compare governments, a model needs to be structured around uniform standards. In this layer, any inflows of resources and outflows of resources that would be recognized under the standardized basis, but not the government’s own budgetary basis, would be added to, or subtracted from, the fund balance of the previous layer. For example, suppose a government were on a near-cash basis for budgeting purposes and thereby recognized property taxes as revenue only as collected. GASB standards, however, might specify that property taxes collected within 60 days after the close of the year also would be recognized. The additional taxes to be collected within the 60-day period would be added to the previous layer’s fund balance and thereby incorporated in the fund balance to be reported in this second layer.
B129. The third layer would be on a “full accrual” basis of accounting, albeit one excluding some capital assets and related liabilities. The assets focused upon would include long-term financial assets as well as equipment and similar capital assets that were purchased with general fund resources. They would exclude infrastructure and other capital assets acquired with bonds and comparable long-term obligations. The liabilities would include all obligations except for the debt and comparable obligations related to the excluded assets. This third layer would incorporate any adjustments to the previous fund balance required to transform the statement from the modified accrual basis of accounting to the full accrual basis of accounting. These would include, for example, property taxes expected to be collected outside of the 60-day window, pension and OPEB expenses that exceeded contributions, and the various modifications associated with relevant capital assets and related long-term borrowings.
B130. The balance sheet would consist of three columns—one for each of the three bases. Each would report the total assets and liabilities recognized on the particular basis. Thus, consistent with the previous example, the budget (near-cash) basis column on the balance sheet would report zero property taxes receivable; the modified accrual basis of accounting column would report taxes receivable collected within 60 days; the full accrual basis column would report all taxes receivable.
B131. The Board member that expresses the alternative view acknowledges that for this proposal to be put into practice, there would be details that would need to be worked out and implementation standards and guidance that would need to be issued. However, the Board member that expresses the alternative view is confident that both the statement of activities and the balance sheet could be formatted and presented in ways that are readily understandable to the audiences to whom the financial statements are targeted. Moreover, the Board member that expresses the alternative view believes that this approach would not require governments to report any information that is not already incorporated in their budgets, their existing governmental fund financial statements, or their government-wide financial statements. Thus, the Board member that expresses the alternative view believes that few, if any, modifications to existing accounting systems would be required. While, as with any new model, governments would likely incur additional financial statement-preparation costs in the first year of implementation, the Board member that expresses the alternative view anticipates that they would not be significant.
Better to Take a More Limited Approach to Remedying the Current Model’s Flaws Than to Adopt an Equally or More Seriously Flawed Model
B132. The Board member that expresses the alternative view concedes that there are both conceptual flaws in the current model as well as inconsistencies in how it is applied. For example, long-term receivables are recognized, whereas long-term liabilities are not. Similarly, some governments apply a 60-day criterion as to when resources other than property taxes become available for expenditure while others apply a longer or shorter period. These flaws, however, can be remedied with straightforward adjustments to the model. Long-term receivables can be removed from the model and a uniform recognition period can be established for all revenues, not just as it is now for property taxes.
B133. The Board member that expresses the alternative view believes that the Board would better serve the interests of its stakeholders by fine-tuning the current model than by introducing a new model that fails to address the current model’s underlying defects. If the past is a guide to the future, the life expectancy of the model will be at least 25 years, thereby preventing major but desirable reforms for at least another generation.
B134. In summary, the Board member that expresses the alternative view sees few, if any, benefits to the short-term financial resources measurement focus model. The model not only loosens the ties between the financial statements and their traditional budgetary moorings, but owing to how it distinguishes between long-term and short-term resources, it is conceptually flawed. As a consequence, it is likely to undermine, rather than inform, user decisions. Furthermore, it fails to address the most acute deficiencies of the present model. Simply stated, its costs outweigh its benefits.

Appendix C: SHORT-TERM FINANCIAL RESOURCES MEASUREMENT FOCUS AND ACCRUAL BASIS OF ACCOUNTING—APPLICATION TO SELECTED TRANSACTIONS AND OTHER EVENTS

C1. This table provides a discussion of the recognition of selected transactions and other events in governmental fund financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, as discussed in paragraphs 12–26 of this Statement. This discussion is intended to explain how the principles of the short-term financial resources measurement focus and accrual basis of accounting should be applied and is nonauthoritative. These transactions are independent of the illustrations in Appendix D.
Transaction or Other Event
Recognition
1. Investments:
Beginning of year (BOY) fair value of investments in a permanent fund was $18,400,000. End of year (EOY) fair value of investments was $18,500,000. No investments matured or were purchased or sold during the year.
This other event is a short-term other event because investments generate cash. An asset (investments) should be recognized for the fair value of the investment. Changes in fair value should be recognized as an inflow of resources.
Recognized amounts:
  • Investments of $18,500,000.
  • Inflows of resources of $100,000 as a current activity.
2. Prepaid insurance:
BOY balance was $5,800. During the year, $60,000 was paid for a one-year insurance policy. EOY balance was $13,800.
This transaction is a short-term transaction because prepaid insurance is consumed as the insurance is provided from the inception of the transaction. An asset (prepaid item) should be recognized for the acquisition of the prepaid insurance. The consumption of the prepaid insurance should be recognized as an outflow of resources.
Recognized amounts:
  • Prepaid asset of $13,800.
  • Outflows of resources of $52,000 as a current activity.
3. Inventory:
BOY balance was $15,200. During the year,
$185,000 was spent on inventory. EOY balance was $23,500. Inventory is expected to be consumed within one year from acquisition.
This transaction is a short-term transaction because inventory is expected to be consumed as the inventory is taken from the stock from the inception of the transaction. An asset (inventory) should be recognized when inventory is purchased. The consumption of the inventory should be recognized as an outflow of resources.
Recognized amounts:
  • Inventory of $23,500.
  • Outflows of resources of $176,700 as a current activity.
4. Special assessments:
BOY receivable balance was $123,851. $41,500 matured and was collected during the year, resulting in an EOY balance of $82,351.
This transaction is a long-term transaction because the period from inception (the date the special assessment was imposed) to conclusion (the date the final installment is due) is greater than one year. An asset (special assessment receivable) should be recognized when the payments are due. Special assessments that mature during the year should be recognized as an inflow of resources.
Recognized amounts:
  • No special assessment receivable.
  • Inflows of resources of $41,500 as a current activity.
5. Notes receivable
BOY receivable balance of notes receivable (binding arrangement) was $4,387,776. $645,000 matured and was collected during the year. EOY receivable balance was $3,742,776.
This transaction is a long-term transaction because the period from inception (the date the note receivable arose) to conclusion (the date the final payment is due) is greater than one year. An asset (notes receivable) should be recognized when the payments are due. Notes that mature during the year should be recognized as an inflow of resources.
Recognized amounts:
  • No notes receivable.
  • Inflows of resources of $645,000 as a current activity.
6. Hedging derivative instrument:
The hedging derivative instrument (binding arrangement) was an interest rate swap that was an effective hedge, had nine years remaining on the term of the binding arrangement, had a declining notional amount, and was associated with long-term debt. The instrument had a negative fair value of $532,882 at the EOY and payments totaling $223,938 were made during the year.
This transaction is a long-term transaction because it is an effective hedge and the period from inception (the date the binding arrangement was entered into) and conclusion (the date the final payment is due) is greater than one year. A liability and an outflow of resources should be recognized when the payment is due.
Recognized amounts:
  • No liability.
  • Outflows of resources of $223,938 as a noncurrent activity.
7. Claims payable:
BOY liability was $1,300,000. Claims incurred during the year were $2,750,000. Claims paid during the year were $1,500,000. EOY liability was $2,550,000. The claims result from a routine risk retention arrangement and are expected to be paid within one year from inception.
This other event is a short-term other event because the period from inception (the date each claim occurs [that is, recognition of the liability]) and conclusion (the date each claim is expected to be paid) is less than one year. A liability should be recognized for the amounts payable at year-end. Claims incurred during the year should be recognized as an outflow of resources.
Recognized amounts:
  • Claims payable of $2,550,000.
  • Outflows of resources of $2,750,000 as a current activity.
8. Tax anticipation notes (TANs)
BOY balance was $4,000,000, all of which was paid during the year. $4,400,000 of TANs with a 15-month maturity were issued in the current year, leaving an EOY balance of $4,400,000.
This transaction is a short-term transaction because
TANs are considered short-term transactions (long-term debt issued for short-term purposes). A liability should be recognized for amounts payable at year-end. No inflows of resources or outflows of resources should be recognized because short-term borrowing transactions affect only assets and liabilities.
Recognized amounts:
  • TANs payable of $4,400,000.
  • No inflows of resources or outflows of resources.
9. Pension benefits:
BOY net liability for pensions was $485,043. EOY net liability for pensions was $826,333. Contributions are paid to a pension plan that is responsible for making benefit payments.
This transaction is a long-term transaction because the period from inception (the dates employees provide services to the government) and conclusion (the date the final pension benefit is expected to be paid) is greater than one year. A liability should be recognized for amounts that are due at the end of the year and have not been paid, if any. Contributions to the pension plan should be recognized as an outflow of resources when the amounts become due.
Recognized amounts:
  • No liability.
  • Outflows of resources for the amount of contributions as a current activity.
10. Other postemployment benefits (OPEB):
BOY total OPEB liability was $39,750,309. EOY net total OPEB liability was $42,785,037. This is a pay-as-you-go plan, benefits are paid directly to employees.
This transaction is a long-term transaction because the period from inception (the dates employees provide services to the government) and conclusion (the date the final OPEB is expected to be paid) is greater than one year. A liability should be recognized for amounts that are due at the end of the year and have not been paid, if any. Benefit payments to employees should be recognized as an outflow of resources when the payments become due.
Recognized amounts:
  • No liability.
  • Outflows of resources for the amount of benefit payments as a current activity.
11. Bonds payable:
BOY liability was $33,414,493. Changes during the year included repayment of $8,331,457 of principal, resulting in an EOY liability of $25,083,036.
This transaction is a long-term transaction because the period from inception (the date the bond payable was entered into) and conclusion (the date the final payment is due) is greater than one year. A liability should be recognized for principal amounts when a payment is due. The principal payments made during the year should be recognized as an outflow of resources.
Recognized amounts:
  • No liability.
  • Outflows of resources of $8,331,457 as a noncurrent activity.
12. Leases:
BOY liability was $4,722,553. There was a $233,200 issuance of leases and $1,273,469 of principal paid during the year. EOY liability was $3,682,284. Interest associated with leases is reported as accrued interest.
This transaction is a long-term transaction because the period from inception (the commencement date of the lease) and conclusion (the date the final payment is due) is greater than one year. A liability and an outflow of resources should be recognized as principal amounts become due. Inflows of resources and outflows of resources should be recognized at the inception of the lease.
Recognized amounts:
  • No liability.
  • Inflows of resources of $233,200 as a noncurrent activity.
  • Outflows of resources of $1,506,669 ($233,200 of new leases and $1,273,469 of principal paid) as a noncurrent activity.
13. Accrued interest on long-term debt and leases:
BOY liability was $899,750. Interest on long-term debt and leases incurred during the year was $2,394,534. Amounts paid during the year were $2,448,950. EOY liability was $845,334.
This transaction is a long-term transaction because accrued interest payments are made pursuant to a binding arrangement for which the period from inception (the date the debt agreement was entered into or the commencement date of the lease) and conclusion (the date the final payment is due) is greater than one year. A liability and an outflow of resources should be recognized when the payments are due.
Recognized amounts:
  • No liability.
  • Outflows of resources of $2,448,950 as a noncurrent activity.

Appendix D: ILLUSTRATION

D1. This appendix illustrates certain requirements of this Statement. The exhibits are illustrative only and are not intended to modify or limit the requirements of this Statement or to indicate the Board’s endorsement of the policies or practices shown. Application of the provisions of this Statement may require assessment of facts and circumstances other than those illustrated here. Disclosures set forth in other GASB pronouncements, in addition to those shown in Exhibit 14, are required, if applicable.
Exhibit 1: Management’s Discussion and Analysis
Exhibit 2: Statement of Net Position
Exhibit 3: Statement of Activities
Exhibit 4: Short-Term Financial Resources Balance Sheet—Governmental Funds
Exhibit 5: Statement of Short-Term Financial Resource Flows—Governmental Funds
Exhibit 6: Reconciliation of the Statement of Short-Term Financial Resource Flows to the Statement of Activities
Exhibit 7: Statement of Fund Net Position—Proprietary Funds
Exhibit 8: Statement of Revenues, Expenses, and Changes in Fund Net Position— Proprietary Funds
Exhibit 9: Statement of Cash Flows—Proprietary Funds
Exhibit 10: Statement of Fiduciary Net Position—Fiduciary Funds
Exhibit 11: Statement of Changes in Fiduciary Net Position—Fiduciary Funds
Exhibit 12: Combining Statement of Net Position—Discretely Presented Component Units
Exhibit 13: Combining Statement of Activities—Discretely Presented Component Units
Exhibit 14: Selected Notes to Financial Statements
Exhibit 15: Budgetary Comparison Schedule—General Fund
Exhibit 16: Budgetary Comparison Schedule—Transportation Special Resources Fund
Exhibit 17: Notes to Budgetary Comparison Schedules
Exhibit 18: Combining Short-Term Financial Resources Balance Sheet—Nonmajor Governmental Funds
Exhibit 19: Combining Statement of Short-Term Financial Resource Flows—Nonmajor Governmental Funds
Exhibit 20: Combining Statement of Fund Net Position—Internal Service Funds
Exhibit 21: Combining Statement of Revenues, Expenses, and Changes in Fund Net Position—Internal Service Funds
Exhibit 22: Combining Statement of Cash Flows—Internal Service Funds
Exhibit 1
MANAGEMENT’S DISCUSSION AND ANALYSIS
The purpose of the management’s discussion and analysis (MD&A) is to help City residents and other readers to understand what the financial statements and notes in this financial report say about the City’s financial health and how and why it changed since last year. It contains information drawn from those other parts of the report, accompanied by explanations informed by the finance staff’s knowledge of the City’s finances.
If you have questions about this report or require further information, contact the Department of Finance at dof@samplecityurl.gov or 000-000-0000.
Introduction to the Financial Report
The City’s financial report contains basic financial statements. Those financial statements present the City’s finances at both an overall and a detailed level. The first two—the government-wide financial statements—cover the City’s governmental activities and business-type activities (together, the primary government) and discretely presented component units. (See the diagram in Figure A-1.)
  • Governmental activities comprise the City’s most basic functions, such as public safety, culture and recreation, and social and economic development. Governmental activities primarily are financed by taxes paid by City residents and businesses and grants from the State of Example and the federal government.
  • Business-type activities are City services primarily financed in whole or in part with charges to customers—electric utility, public buses, and municipal golf courses.
  • Discretely presented component units are legally separate entities for which the City is financially accountable—most notably the Sample City Energy Authority and the Robert L. Antonio Airport. (To see their separately issued financial reports, visit www.sampleenergyurl.gov and www.rlaairporturl.gov.)
The remaining basic financial statements present the City’s finances in greater detail and present fiduciary activities. As their name implies, the fund financial statements disaggregate financial information by separate funds for the purpose of reporting on specific purposes for which resources are used or to which they are restricted. The City reports three groups of funds:
  • Governmental fund financial statements report all of the governmental activities except those that involve providing services to City departments. In addition to the City’s main operating fund—the general fund—those financial statements report a special resources fund to track the use of a portion of the City’s restricted sales tax, a debt service fund to record the repayment of outstanding bonds, and a capital projects fund to account for resources used to acquire transportation infrastructure and certain other long-lived assets.
  • Proprietary fund financial statements report all of the business-type activities (enterprise funds) and the services provided to City departments (internal service funds).
  • Fiduciary fund financial statements report resources for which the City acts as a trustee or custodian, including the City Public Safety Pension Plan trust fund. The resources in those funds do not belong to the City and cannot be used to provide services, which is why they are not included in the government-wide financial statements.
Figure A-1. Contents of the City’s Financial Report
Lastly, the Energy Authority and the Airport (which are combined with nonmajor component units in a single column in the government-wide financial statements), are disaggregated in combining financial statements for discretely presented component units following the fund financial statements.
The next section of this financial report contains notes to financial statements, which delve deeper into the City’s finances as reported in the financial statements. The information in the notes is as important to understanding the City’s finances as the information in the financial statements. The City uses notes to (1) present information in greater detail than is possible within the financial statements themselves, (2) explain the nature of amounts reported in the financial statements and how those amounts were determined, and (3) report certain information that does not meet the requirements for inclusion in the financial statements (such as certain contingencies).
The notes are followed by budgetary comparison schedules of the General Fund and Transportation Special Resources Fund that show how the budgeted amounts for inflows and outflows changed during the fiscal year from the original budget to the final budget. It also compares the final budget with the actual results for the year and includes an analysis of the budgetary activities. The budgetary comparison and this MD&A are required supplementary information. The required supplementary information schedules also present information about the City’s pensions and retiree health insurance, including how the size of the City’s liabilities for pensions and retiree health insurance have changed over time, what factors caused those changes, and the City’s contributions to those plans each year.
In addition to this required information, we have included a section with combining statements that provide details about the City’s nonmajor governmental funds and internal service funds, each of which are added together and presented in single columns in the basic financial statements.
Types of Information in the Financial Statements
All of the City’s financial statements, except for the governmental fund financial statements, use the economic resources measurement focus and accrual basis of accounting. (See Figure A-2.) In other words, they comprehensively report all types of financial statement elements:
  • Assets—resources the City controls, from short-term assets like cash to long-term assets like roads and bridges
  • Liabilities—amounts the City owes, from short-term liabilities such as salaries payable to long-term liabilities such as outstanding debt and net amounts owed to employees for pensions
  • Deferred outflows of resources and deferred inflows of resources—flows that occurred during the year, or in prior years, but that will not be reported as expenses and revenues until the future year to which they are related
  • Revenues and expenses—inflows and outflows of economic resources, respectively, related to the current year.
Governmental fund financial statements use the short-term financial resources measurement focus and accrual basis of accounting to report on the more immediate financial health of the City and related flows of resources. Whereas the other financial statements present information that informs both short- and long-term assessments, the governmental funds financial statements are focused on the short term—within one year from the inception of the transaction or other event. The assets, liabilities, deferred outflows and inflows of resources, and outflows and inflows of resources are those related to short-term financial resources. The governmental funds do not report nonfinancial assets, such as capital assets, or long-term items, such as general obligation bonds, but they do report the flows of short-term financial resources related to those long-term items; for example, the proceeds from issuing bonds or selling equipment, as well as principal and interest payments on bonds and spending on the construction of a City building.
More detail about the measurement focuses and bases of accounting can be found in the first note to financial statements, the summary of significant accounting policies, beginning on page XX.
Figure A-2. Types of Information Reported in the City’s Financial Statements
Analysis of the City’s Finances
As of June 30, 20X5, the City’s total net position—assets and deferred outflows minus liabilities and deferred inflows—was nearly $2.3 billion, an increase of $127.0 million or 5.9 percent compared with 20X4. The City’s net investment in its capital assets increased only slightly by 1.3 percent or $21.1 million because the capital assets increased by a net of $74.3 million in conjunction with an increase in related debt of $53.2 million. Net position grew, as described in more detail below, because of a 3.5 percent or $25.3 million increase in restricted net position, including restricted net position related to capital projects, and a 31.5 percent or $80.6 million increase in unrestricted net position. Most of the increase in net position was the result of the financial performance of the governmental activities. This section of MD&A examines the finances of the governmental activities and business-type activities separately.
Governmental Activities
Revenues continued to exceed expenses in the current year, resulting in an increase in net position. The total net position of the City’s governmental activities was over $1.7 billion, an increase of $117.7 million or 7.3 percent from 20X4. Various events contributed to this increase in net position; however, the six primary factors explaining the increase, in order of magnitude, are as follows:
(1) Increases in intergovernmental grant revenues, particularly related to capital assets
(2) Growth in various revenues due to the strength of the national and local economies and a major court decision
(3) A law that directs a portion of sales taxes to build up a financial emergency fund
(4) Increases in expenses for certain programs and functions
(5) Transfers to the business-type activities
(6) Damage related to the March 20X5 flood.
Figure A-3. Governmental Activities Revenues by Source
Growth in Intergovernmental Grant Revenues
There were notable increases in 20X5 in both operating and capital grants and contributions. Capital grants and contributions, which account for 5.2 percent of overall revenues for governmental activities, more than doubled to $30.9 million from 20X4 to 20X5. Most of that amount was a one-time $22.0 million capital contribution from the federal government in the form of the land and facilities of former Army Base 559, which is located in Sample City and ceased operations in 20X0. The City is in the process of converting the base to a central public works and transportation garage and headquarters.
The City also received a federal mass transit grant of $6.5 million, primarily to purchase new hybrid buses for the Sample City Transit Authority (“CityBus”), an Enterprise Fund, with accessibility features that will make it easier for residents with physical challenges to use the transit system. The grant proceeds were transferred to the Authority with a portion of the proceeds from the tax-backed bonds.
Operating grants and contributions, accounting for 6.4 percent of revenues for governmental activities, increased 22.9 percent to $38.2 million in 20X5. All of that growth came from public safety grants from both the State and federal governments, which totaled $31.4 million or over 82 percent of the operating grant revenue. Most of the additional grant revenue was received as part of a federal program to improve local emergency services readiness to respond to a variety of emergency scenarios, including natural disasters, terrorist attacks, and medical crises.
Growth in Revenues Due to Economic Growth
The strength of the City and national economies has resulted in growth of several of the City’s most significant revenue sources. Property taxes, which are 13.2 percent of the City’s governmental activities revenue sources, rose 2.4 percent due to a similar percentage increase in assessed values; the City reassessed property values which had not been updated since 20X2. As already mentioned, increases in taxable retail sales compensated for the end of the temporary sales tax add-on to keep sales tax revenues steady from last year.
Other taxes include franchise taxes and use taxes, which are the City’s next two largest taxes. Revenues from the franchise tax—which applies to a measure of a corporation’s net worth—increased 23.2 percent as corporate values surged. The use tax revenues grew 27.0 percent, in part due to the economy, but more significantly due to a major court decision leading to the more successful collection of use tax from out-of-state sellers.
Lastly, earnings on the City’s investments, which were 3.5 percent of the governmental activities revenues, rose 170.9 percent from the prior year as local economic growth extended throughout all of 20X5 leading to more cash to invest. The value of the City’s investments related to governmental activities increased 16.6 percent last year, accounting for the majority of the overall 11.7 percent increase in current assets.
Sales Tax
The largest single source of governmental activities revenue for the City is the local-option sales tax, which amounted to $279.6 million in 20X5, or 46.7 percent of total revenue for the governmental activities. (See Table A-2 and Figure A-3.) Sales tax revenue increased only 0.5 percent in 20X5 despite a 7.9 percent growth in taxable retail sales during the year, due to the expiration of a temporary 0.25 percent sales tax that financed the extension of a Highway 401 spur into downtown. That construction project was completed in 20X4.
The City sales tax rate of 3.40 percent has three components. The largest single portion, 1.50 percent, is restricted to paying for road and bridge construction and other infrastructure projects. Another 0.65 percent is restricted to street and bridge maintenance and other infrastructure upkeep. The remaining 1.25 percent provides unrestricted resources to support City services.
In 20X3, the City Council approved an ordinance to temporarily direct 0.09 percent of that 1.25 percent into the City’s financial emergency reserve beginning in fiscal year 20X4. The related sales tax revenues will be set aside into the reserve until it reaches 10 percent of the City’s adopted operating budget. Since the ordinance was passed, the reserve has grown from $3.7 million to $19.1 million, which represents 5.3 percent of the 20X6 adopted operating budget. Additions to the reserve of $7.4 million in 20X5 represented fully half of the 16.8 percent increase in governmental activities unrestricted net position.
Growth in Expenses
Figure A-4. Governmental Activities Expenses by Function
The increases in revenue were accompanied by a more rapid increase in the City’s costs of providing services. Governmental activities expenses rose 14.1 percent overall. Most notably, social and economic development expenses more than tripled to $79.7 million in 20X5. As a result, social and economic development expenses represented 17.3 percent of total expenses (see Figure A-4); by contrast, they were just 6.5 percent of expenses in 20X4. The increase in 20X5 was related entirely to the City’s contribution of $55.3 million of infrastructure and facilities to several not-for-profit organizations. The transfer of those capital assets was part of a development program under which the City financed the construction or improvement of facilities that are within the Sample City borders.
The overall increase in governmental activities expenses for most City programs reflects, in part, salary and benefit increases under the current collective bargaining contract with nonuniformed City employees. The contract provided for raises of 2.0 to 4.0 percent in 20X5, depending on position.
Expenses for culture and recreation programs, at 5.6 percent of total expenses, increased 20.1 percent in 20X5. Aside from the contract-related increases in personnel costs (approximately half of the personnel costs were contract related), the expense increase in this area related primarily to the one-time cost of a feasibility study to assess the physical condition of pools, parks, playgrounds, and other recreation facilities and estimate the need for capital investment in those assets.
Interest on long-term debt for governmental activities, which approximates 5.5 percent of total expenses, also increased 20.1 percent to $25.6 million in 20X5. That increase resulted, in part, from interest costs on the $118.1 million tax-backed debt issuance. It also was the result of a refunding of general obligation debt that initially increased interest costs but will reduce interest going forward. (The refunding is discussed further below.)
By contrast, the function that comprises the largest portion of governmental activities expenses—public safety at 35.4 percent of total expenses—experienced a decline in expenses from 20X4 to 20X5 of 6.1 percent. Salary increases and a small rise in headcount of 1.2 percent added to the costs of police, fire, and emergency services. However, that was more than offset by the decrease in pension expenses associated with the substantial growth in the value of the Public Safety Retirement Plan’s investments.
Other Changes in Net Position
Total governmental activities revenues exceeded total expenses in 20X5 by $144.2 million. That amount is greater than the $117.7 million increase in net position for two reasons. First, the City incurred $7.5 million in costs related to damage from the catastrophic flooding that occurred in the City and neighboring communities in March 20X5. It is unclear at present whether any of those costs will be recoverable through claims with the City’s insurer or the federal government. The flood-related expenses are shown separately from other expenses in Table A-2 and the government-wide statement of activities because they are highly unusual costs; Sample City has not experienced rainfall of that magnitude in at least 50 years.
Second, the governmental activities transferred resources to the business-type activities (enterprise funds) for the purpose of financing capital projects for those activities. The transfer of $19.0 million included the $6.5 million federal mass transit grant and $12.5 million of the proceeds of the tax-backed bonds. More than four-fifths of the transfer went to CityBus.
Governmental Funds
The City reports four major funds individually in the governmental fund financial statements. Those funds are the general fund, transportation special resources fund, debt service fund, and infrastructure capital projects fund. Most of the discussion regarding governmental activities is equally applicable to the finances of those governmental funds. However, certain factors that are relevant to the City’s short-term financial health are more apparent in the fund financial statements than in the government-wide financial statements. There were significant changes to three of the four major funds as discussed in more detail below.
General Fund
Fund balance represents the financial standing of a governmental fund as of the end of the fiscal year from a short-term perspective. The fund balance of the City’s general fund decreased by 1.9 percent. Adjusting for the flood damage, the general fund’s fund balance would have been $7.5 million greater.
A key indicator of the City’s financial wherewithal is unassigned fund balance, which represents short-term financial resources that are available for spending on any City purpose. Because of the flood damage, unassigned fund balance fell by 2.8 percent below the 20X4 level.
Debt Service Fund
The City’s inflows from property taxes may be used only to repay outstanding general obligation bonds. The small increase in inflows from property taxes mentioned earlier was more than sufficient to cover debt service fund outflows for principal and interest. Overall, fund balance in the debt service fund increased 3.9 percent.
Capital Projects Fund
Outlays for capital assets increased in 20X5 in the capital projects fund, the highest level in 10 years. The increase was the product of several major components of the city-wide highway and street improvement program finishing this year and substantial progress being made on others. (Capital asset activity is discussed further below.) Thus, despite those capital outlays and an additional transfer out to finance capital investments in other funds (principally CityBus), the combination of sales tax inflows of resources and tax-backed bond proceeds increased fund balance by 13.1 percent.
Business-Type Activities and Enterprise Funds
The total net position of the City’s business-type activities (which are reported as major enterprise funds) also increased in 20X5, though more modestly than that of the governmental activities. Business-type activities’ net position increased $9.3 million or 1.7 percent, to $548.4 million, from the prior year. It should be noted that the $9.3 million increase reflects the previously noted transfer of $19.0 million from the governmental activities. In other words, absent the transfer, total net position would have declined by $9.7 million by which expenses exceeded revenues for the year. In fact, unrestricted net position declined by 16.1 percent. Nevertheless, those results represent an improvement over 20X4, when the change in net position was $5.7 million.
Among the three enterprise funds only the Utility had a positive financial performance in 20X5. Expenses for the Utility rose 5.3 percent, predominantly because of a significant increase in pension expense of $2.8 million. On the other hand, interest on outstanding debt declined 1.9 percent. Revenues, which were 95.8 percent charges for services, kept pace with expenses, by rising 5.1 percent. For reasons already stated, investment earnings increased 76.0 percent.
There was an increase in the net position of CityBus due to the fact that it received the aforementioned transfer of $15.4 million, which is restricted to investment in capital assets. Absent the operating subsidy, operating expenses exceeded operating revenues, which was primarily caused by opening six additional routes. In order to accommodate riders, the City also purchased two new buses that were originally planned to be purchased in 20X6 as part of the City’s bus replacement program. Finally, ridership declined by nearly 3.0 percent in 20X5 as most public transit was cancelled for approximately six weeks due to significant damage on numerous routes making certain roads impassable. This resulted in an identical decrease in fare revenue of nearly 3.0 percent.
The net position of MuniLinqs (the City’s golf courses) decreased $3.1 million. Despite lowering greens fees and rental charges in order to attract more golfers, the number of rounds played dropped 8.8 percent. Part of the reason for the decline was a delayed spring opening for two of the three courses because of the flooding. However, trends at the City’s courses mirror a national decline in the number of people playing golf.
Significant Nonfinancial Asset and Long-Term Debt Activity
The discussion thus far has only touched upon certain significant transactions and events during 20X5 with respect to capital assets and long-term debt. Overall, the net book value of capital assets—original cost minus accumulated depreciation—increased 3.2 percent over 20X4. However, that relatively small amount does not completely capture the substantial amount of capital investment activity that occurred in 20X5.
The City’s governmental activities had $182.8 million in its beginning balance of construction in progress with another $145.8 million in capital projects started during 20X5. Of those amounts, the City put $127.4 million into operation during the year and, therefore, moved that amount to the other capital asset categories of infrastructure and buildings and improvements. Additionally, the City contributed $55.3 million to not-for-profit organizations. This resulted in an ending balance of construction in progress of $145.9 million. Many of the completed and ongoing capital projects are a part of the city-wide highway and street improvement program.
As previously noted, significant capital investments also are expected to be made as part of converting the former Army base to a city-wide public works and transportation garage and headquarters. The receipt of the base was reported as a $22 million capital contribution, which increased both the land and buildings and improvement categories of the City’s capital assets by $15 million and $7 million, respectively.
As discussed earlier, a portion of the sales tax is used to invest in infrastructure and other construction projects, which provides financing on a pay-as-you-go basis. The City also issues general obligation bonds (repaid primarily with property taxes levied by the City) and tax-backed bonds (secured by sales tax revenues) to finance the construction, renovation, and purchase of capital assets.
In 20X3, voters approved a referendum authorizing the City to issue up to $125 million of tax-backed bonds to pay for a city-wide capital program to reconstruct major routes, including adding lanes, and to upgrade street surfaces in the business district. The City issued $118.1 million of those bonds in 20X5, which is the primary reason governmental activities long-term liabilities increased 5.7 percent overall. Slightly more than half of the addition to long-term liabilities by those bonds was offset by a reduction in general obligation debt outstanding (which decreased 12.4 percent) due to a series of bond calls and refundings that continued in 20X5.
Total bonds and notes payable outstanding increased 8.0 percent to $718.5 million in 20X5. The most prominent aspect of that change, as already mentioned, was the issuance of $118.1 million of bonds backed by the City sales tax, under the authorization of the 20X3 voter referendum. Netted against the principal that was repaid during the year, that new issuance increased tax-backed bonds outstanding by 33.9 percent.
By contrast, the amount of general obligation bonds outstanding decreased 12.4 percent to $385.6 million. Each year since 20X0, the City has engaged in bond calls and refundings of significant amounts of general obligation debt, which has had the effect of reducing annual debt payments. In 20X5, the City called and refunded $32.2 million of general obligation bonds. Additionally, the City has not issued any new general obligation debt since fiscal year 20W9.
As of the end of 20X5, the City’s bonds—both general obligation and tax-backed— possessed the highest available rating from the municipal bond ratings services, A-4+. Because all of the City’s debt is voter approved, none of its outstanding debt is subject to the state-imposed debt limit.
Currently Known Facts, Decisions, or Conditions
The City is aware of five developments that will have an impact on the City’s finances in the future and were incorporated into next year’s budget:
(1) Public safety employee unions’ new contract
(2) Amendments to the City budget
(3) Recent economic reports
(4) Adoption of the State budget
(5) Pension plan changes.
Public Safety Employee Unions’ New Contract
The collective bargaining agreement for uniformed police officers and firefighters expired at the end of fiscal year 20X5. On September 15, 20X5, the members of the public safety employee unions ratified a new four-year contract retroactive to the start of fiscal year 20X6. The key features of the contract are annual increases in base pay of 3.5 percent; increases in rank pay, shift premiums, and other add-ons averaging 2.5 percent; and a series of nonpensionable bonuses at the end of each calendar year. The contract also changes certain staffing rules that will allow the City more flexibility in deploying its uniformed employees and, as a result, is expected to reduce overtime spending. The City’s Labor Relations Division budgeted that the contract will annually add $4.1 million of expenses to the public safety function, net of reduced overtime costs.
Amendments to the City Budget
The first mid-year amendment to the City’s operating budget addresses budgetary variances that are found in the actual results for the first quarter ending September 30, 20X5. The additional public safety expenses resulting from the new contract were a prominent aspect of the amendment, which was adopted by the City Council on November 1, 20X5. Another noteworthy concern was addressed in an amendment. Use tax revenues for the first quarter were 4.6 percent below budget. Extrapolated for the full year, use taxes would fall short of the budget by $1.9 million dollars. The City Council decided to monitor ongoing tax receipts for further deterioration and to postpone consideration of a rate increase until the second mid-year modification. To potentially buffer the lost revenue, the City Council identified certain positions that are vacant or expected to become vacant that could be filled more slowly than originally planned.
Recent Economic Reports
The unemployment rate for Sample City has increased slightly for five consecutive months through September 20X5 (the most recent month for which data were available at the time this report was issued). Unemployment in May 20X5 was 2.7 percent. By September, unemployment had reached 3.4 percent.
Building permit applications were assumed in the adopted budget for fiscal year 20X6 to increase approximately 2.0 percent, a lower level than the average annual increase of 4.1 percent since 20W7. However, through the first quarter of fiscal year 20X6, applications are flat compared with the same period last year.
Adoption of the State Budget
In November 20X5, the State adopted its operating budget for the fiscal year ending December 31, 20X6. The City’s finances are affected by many parts of the State budget, though two provisions in particular may have a negative impact on the City’s finances. First, the adopted State budget includes a plan to retain a quarter of a percentage point from the local-option sales tax imposed by counties and municipalities. The loss of that 0.25 percent from the City’s sales tax is expected to reduce the City’s revenue by approximately $11.0 million in City fiscal year 20X6 and $23.5 million in City fiscal year 20X7.
The other State budget provision is the winding down of a Department of Transportation grant program that provides resources for transportation and mass transit capital projects and subsequent maintenance. The City’s Capital Improvement Plan anticipated that program would be a funding source for parts of the city-wide highway and street improvement program and the conversion of the Army base to a public works and transportation garage. In total, the City budgeted $28.7 million from that grant program through 20X9 based on the published long-term capital plan. The City still is budgeting to receive that amount through the end of the grant period.
Pension Plan Changes
The City provides pension benefits to its nonuniformed employees through the Municipal Employee Pension Plan, a cost-sharing defined benefit plan administered by the State of Example Retirement System. In August 20X5, the System announced that it was revising certain assumptions that factor into the measurement of the total pension liability for all participating governments in the plan, including lowering the long-term expected rate of return on plan investments (and, thereby, the discount rate) from 7.50 to 7.25 percent and utilizing updated mortality tables with longer life expectancies. The changes would be effective for State fiscal year 20X6.
It is expected that the change in the discount rate will increase the city’s contractually required contribution for the fiscal year beginning July 1, 20X6. This amount is not yet determinable.
Exhibit 2
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Exhibit 3
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Exhibit 4
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Exhibit 5
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Exhibit 6
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Exhibit 7
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Exhibit 8
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Exhibit 9
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Exhibit 10
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Exhibit 12
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Exhibit 13
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Exhibit 14
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Exhibit 14 (continued)
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Exhibit 14 (continued)
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Exhibit 15
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Exhibit 16
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Exhibit 19
Exhibit 20
Exhibit 21
Exhibit 22

Appendix E: CODIFICATION INSTRUCTIONS

Codification of Governmental Accounting and Financial Reporting Standards—June 2024 Update
E1. The instructions that follow update the December 31, 2019 Codification of Governmental Accounting and Financial Reporting Standards (Codification), as amended by Statements No. 91, Conduit Debt Obligations, No. 92, Omnibus 2020, No. 93, Replacement of Interbank Offered Rates, No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, No. 96, Subscription-Based Information Technology Arrangements, and No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, and Implementation Guide No. 2020-1, Implementation Guidance Update—2020, for the provisions of this Statement. Only the paragraph number of this Statement is listed if the paragraph will be cited in full in the Codification.
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[In all sections, update cross-references.]
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SUMMARY STATEMENT OF PRINCIPLES SECTION 1100
Sources: [Add GASBS XX.]
.102 [Replace financial resources with related assets; replace equities with net position.]
.103 [Replace special revenue funds with special resources funds.]
.108 [Insert the following before the last sentence:] Long-term debt issued for short-term purposes should be reported as liabilities in governmental funds and in the governmental activities column in the government-wide statement of net position.
.109 [Revise the first sentence as follows:] The government-wide statement of net position and the statement of activities should be presented applying the economic resources measurement focus and accrual basis of accounting.
.110 [Revise as follows:] In fund financial statements, the short-term financial resources measurement focus and accrual basis of accounting or economic resources measurement focus and accrual basis of accounting, as appropriate, should be used in measuring financial position and operating results.
  1. Financial statements for governmental funds should be presented applying the short- term financial resources measurement focus and accrual basis of accounting.
  2. Proprietary fund statements of fund net position and revenues, expenses, and changes in fund net position should be presented applying the economic resources measurement focus and accrual basis of accounting.
  3. Financial statements of fiduciary funds should be presented applying the economic resources measurement focus and accrual basis of accounting. The recognition of certain liabilities of fiduciary funds is discussed in paragraph .132 of Section 1600.
  4. [Insert current subparagraph (d).]
.111 [In subparagraph (c), replace special revenue fund with special resources fund; replace encouraged with required.]
[Revise the heading before paragraph .112 as follows:]
Inflow of Resources and Outflow of Resources Account Classification
.112 [Revise as follows:]
a. At a minimum, the statement of activities should present:
(1) Activities accounted for in governmental funds by function, as discussed in paragraph .133 of Section 1800, to coincide with the level of detail required in the governmental fund statement of short-term financial resource flows
(2) Activities accounted for in enterprise funds by different identifiable activities.
b. Governmental fund inflows of short-term financial resources should be classified by fund and source. Outflows of short-term financial resources should be classified by fund, function (or program), organization unit, activity, character, and principal classes of objects.
c. Proprietary fund revenues should be reported by major sources. Revenues and expenses should be distinguished as operating, noncapital subsidy, and other nonoperating.
d. Proceeds of general long-term debt issues should be classified separately from other noncurrent inflows of resources in the governmental fund financial statements.
e. Contributions to term and permanent endowments, contributions to permanent fund principal, other capital contributions, unusual or infrequent items, and transfers between governmental and business-type activities should each be reported separately from, but in the same manner as, general revenues in the government-wide statement of activities. In the proprietary fund statement of revenues, expenses, and changes in fund net position, contributions to term and permanent endowments and capital contributions should be reported as other nonoperating revenues and expenses. In proprietary funds, transfers should be reported as noncapital subsidies or as other nonoperating revenues and expenses. In proprietary funds, unusual or infrequent items should be reported separately after other nonoperating revenues and expenses. Transfers should be classified separately from other inflows of resources and other outflows of resources in the governmental fund statement of short-term financial resource flows. Unusual or infrequent items should be reported separately after “net flows from noncurrent activities” in the governmental fund statement of short-term financial resource flows.
[NCGAS 1, pp. 2–4, as amended by GASBS 6, ¶15, GASBS 14, ¶11, ¶19, ¶43, and ¶65, GASBS 34, ¶6, ¶15, and ¶69, GASBS 63, ¶8, and GASBS XX, ¶12, ¶22, ¶23, ¶27, ¶30, and fn10; GASBS 14, ¶12 and ¶66, as amended by GASBS 61, ¶4; GASBS 34, ¶6, as amended by GASBS 84, ¶5; GASBS 34, ¶14, ¶15, ¶21, and ¶75; GASBS 34, ¶13, ¶30, ¶80, ¶108, and ¶125, as amended by GASBS 63, ¶8; GASBS 34, ¶16, as amended by GASBS 63, ¶7 and ¶8, GASBS 81, ¶24−¶28, and GASBS XX, fn10; GASBS 34, ¶18, as amended by GASBS 72, ¶79 and GASBS 89, ¶4; GASBS 34, ¶22, as amended by GASBS 81, ¶27; GASBS 34, ¶63, as amended by GASBS 84, ¶5 and ¶18 and GASBS XX, ¶28; GASBS 34, ¶53, as amended by GASBS 63, ¶8 and GASBS XX, ¶10; GASBS 34, ¶82, as amended by GASBS 63, ¶8 and GASBS XX, ¶20; GASBS 34, ¶88, as amended by GASBS XX, ¶9 and ¶27; GASBS 34, ¶89, as amended by GASBS XX, ¶9, ¶10, and ¶27; GASBS 34, ¶92, as amended by GASBS 63, ¶8, GASBS 81, ¶27, and GASBS XX, fn10; GASBS 34, ¶100, as amended by GASBS 48, ¶21, GASBS 63, ¶8, and GASBS XX, ¶29; GASBS 34, ¶107, as amended by GASBS 67, ¶20, GASBS 73, ¶115 and ¶116, GASBS 74, ¶26, GASBS 81, ¶27, GASBS 84, ¶18 and ¶21, GASBS 92, ¶8, and GASBS XX, fn10; GASBS 34, ¶112, as amended by GASBS 63, ¶8 and GASBS XX, ¶27 and ¶30; GASBS 34, ¶130, as amended by GASBS 41, ¶3 and GASBS XX, ¶28 and ¶34; GASBS 37, ¶10, as amended by GASBS XX, ¶11; GASBS 42, ¶9; GASBS 44; GASBS 51, ¶17; GASBS 54, ¶28, as amended by GASBS XX, ¶28; GASBS 84, ¶14 and ¶26; GASBS 84, ¶22, as amended by GASBS 92, ¶9; GASBS XX, ¶12, ¶30, and ¶34]
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GENERALLY ACCEPTED ACCOUNTING PRINCIPLES AND LEGAL COMPLIANCE SECTION 1200
.102 [Revise the sources as follows:] NCGAS 1, ¶4, as amended; GASBS 34, ¶6, as amended by GASBS XX, ¶4–¶11 and ¶30–¶33; GASBS XX, ¶4–¶11, ¶27, and ¶29–¶34
.103 [Add measurement focuses and before bases of accounting.] [NCGAS 1, ¶5, as amended by GASBS XX, fn10]
.104 [Replace revenues for expenditure with inflows of resources for budgetary outflows of resources.] [NCGAS 1, ¶6, as amended by GASBS XX, ¶27]
.105 [Revise as follows:] The annual operating budget, a legally adopted plan of financial operation embodying estimates of proposed budgetary outflows of resources for specific purposes and the proposed means of financing them, is one of the most important of all legal documents governing financial transactions. (See Section 1700.) On legislative approval, the budgetary outflows of resources requests in the budget become binding appropriations that may not legally be exceeded by the government’s operating agencies. Taxes and other inflows of resources sources that finance budgeted outflows of resources require legislative enactment, either in the form of an annual tax ordinance, as in the case of property taxes, or by continuing statutes or ordinances for such inflows of resources as sales taxes and income taxes. [NCGAS 1, ¶7, as amended by GASBS XX, ¶27]
.109 [Replace expenditures with outflows of resources; replace accrual basis with economic resources measurement focus and accrual basis of accounting.] [NCGAS 1, ¶10, as amended by GASBS XX, ¶27 and fn10]
.111 [Revise as follows:] The budget determines the nature and scope of most governmental fund financial operations by setting the amounts and sources of estimated budgetary inflows of resources, on the one hand, and the amounts and purposes of authorized budgetary outflows of resources, on the other. The accounts of several types of governmental funds record, in summary and detail, both the planned budgetary inflows of resources and budgetary outflows of resources, and the actual transactions. In the absence of significant conflicts between legal provisions and generally accepted accounting principles, the financial statements summarize the results of financial operations and financial position as reflected in the accounts. Again, where legal provisions conflict with GAAP, legal-basis data typically are reflected in the accounts and are used as the starting point for deriving statements prepared in conformity with GAAP. [NCGAS 1, ¶125, as amended by GASBS XX, ¶27]
* * *
FUND ACCOUNTING SECTION 1300
Sources: [Add GASBS XX.]
[In Statement of Principle, “Fund Accounting Systems,” replace financial resources with related assets and replace equities with net position.] [NCGAS 1, ¶16, as amended by GASBS XX, fn10; GASBS 34, ¶6 and ¶75]
[In Statement of Principle, “Fund Types,” replace Special revenue funds with Special resources funds.] [GASBS 34, ¶63, as amended by GASBS 84, ¶5 and ¶18 and GASBS XX, ¶28; GASBS 54, ¶28, as amended by GASBS XX, ¶28; GASBS 84, ¶14; GASBS XX, ¶28]
.102 [In subparagraphs (b) and (c) replace the accrual basis of accounting with accrual basis of accounting and replace net position with fund net position; revise subparagraph (a) as follows:]
a. Governmental fund reporting focuses primarily on the inflows, outflows, and balances of short-term financial resources and often has a budgetary orientation. The governmental fund category includes the general fund, special resources funds, capital projects funds, debt service funds, and permanent funds.
Governmental funds are, in essence, accounting segregations of short-term financial resources. Short-term assets are assigned to the various governmental funds according to the purposes for which they may or must be used; short-term liabilities are assigned to the fund from which they are to be paid; and the difference between governmental fund assets and deferred outflows of resources, and liabilities and deferred inflows of resources, the fund equity, is referred to as “Fund Balance.”
The financial statements for governmental funds should be presented applying the short-term financial resources measurement focus and accrual basis of accounting. The governmental fund measurement focus is on determination of financial position and changes in financial position (inflows, outflows, and balances of short-term financial resources).
The financial statements required for governmental funds are a short-term financial resources balance sheet and a statement of short-term financial resource flows. These statements may be supported or supplemented by more detailed schedules.
[NCGAS 1, ¶18, as amended by GASBS XX, ¶12; GASBS 34, ¶63; GASBS 34, ¶64, as amended by GASBS XX, ¶12; GASBS 34, ¶66, ¶91, and ¶92, as amended by GASBS 63, ¶7, ¶8, and ¶12 and GASBS XX, ¶30; GASBS 34, ¶69, as amended by GASBS 63, ¶7, ¶8, and ¶12 and GASBS 84, ¶5–¶18; GASBS 34, ¶106, as amended by GASBS 63, ¶7, ¶8, and ¶12 and GASBS 84, ¶5–¶18; GASBS 34, ¶107, as amended by GASBS 67, ¶20, GASBS 73, ¶115 and ¶116, GASBS 74, ¶26, GASBS 84, ¶18 and ¶21, GASBS 92, ¶8, and GASBS XX, fn10; GASBS 54, ¶28, as amended by GASBS XX, ¶28; GASBS 84, ¶22, as amended by GASBS 92, ¶9; GASBS XX, ¶11 and ¶12]
.103 [Replace Special revenue funds with Special resources funds.] [GASBS 34, ¶63, as amended by GASBS 84, ¶5 and ¶18 and GASBS XX, ¶28; GASBS 54, ¶28, as amended by GASBS XX, ¶28; GASBS 84, ¶14; GASBS XX, ¶28]
.105 [Revise as follows:] Special resources funds are used to account for and report the proceeds of specific inflows of short-term financial resources from current activities other than transfers that are restricted or committed to use for specified purposes other than debt service or capital projects. The term proceeds of specific inflows of short-term financial resources from current activities other than transfers establishes that one or more specific restricted or committed inflows of short-term financial resources should be the foundation for a special resources fund. Those specific restricted or committed inflows of short-term financial resources may be initially received in another fund and subsequently distributed to a special resources fund. Those amounts should not be recognized as inflows of short-term financial resources in the fund initially receiving them; however, those inflows should be recognized as inflows of short-term financial resources in the special resources fund in which they will be used in accordance with specified purposes. The restricted or committed proceeds of specific inflows of short-term financial resources from current activities other than transfers should be expected to continue to comprise a substantial portion of the inflows reported in the fund. Other resources (investment earnings and transfers from other funds, for example) also may be reported in the fund if those resources are restricted, committed, or assigned to the specified purpose of the fund. A stabilization arrangement (as discussed in paragraphs .180 and .181 of Section 1800) would satisfy the criteria to be reported as a separate special resources fund only if the resources derive from a specific restricted or committed inflow of short-term financial resources from current activities other than transfers. Governments should discontinue reporting a special resources fund, and instead report the fund’s remaining resources in the general fund, if the government no longer expects that a substantial portion of the inflows will derive from restricted or committed inflows of short-term financial resources from current activities other than transfers. Resources restricted to use for purposes normally financed from the general fund may be accounted for through the general fund provided that applicable legal requirements can be appropriately satisfied; and use of special resources funds is not required unless they are legally mandated. The general fund of a blended component unit should be reported as a special resources fund. Special resources funds should not be used to account for resources held as a fiduciary activity. Governments should disclose in the notes to the financial statements the purpose for each major special resources fund—identifying which inflows of short-term financial resources are reported in each of those funds. [NCGAS 1, ¶30, as amended by GASBS XX, ¶27 and ¶28; GASBS 14, ¶54, as amended by GASBS XX, ¶28; GASBS 54, ¶21, ¶31, and ¶32, as amended by GASBS XX, ¶28; GASBS 54, ¶30, as amended by GASBS 84, ¶14 and GASBS XX, ¶22 and ¶28; GASBS XX, ¶28]
[Delete footnote 2; renumber subsequent footnotes.]
.106 [Replace expenditure with outflows of short-term financial resources.] [NCGAS 1, ¶10; GASBS 54, ¶33, as amended by GASBS 84, ¶14 and GASBS XX, ¶23]
.107 [Replace expenditure with outflows of short-term financial resources.] [GASBS 6, ¶19, as amended by GASBS 84, ¶18; GASBS 54, ¶34, as amended by GASBS XX, ¶23]
.118 [Replace special revenue fund with special resources fund.] [NCGAI 9, ¶10; GASBS 14, ¶54, as amended by GASBS XX, ¶28]
.119 [Replace special revenue with special resources; replace expenditure with use; and delete the last sentence of the paragraph.] [NCGAS 1, ¶30, as amended by GASBS 6, ¶13 and GASBS XX, ¶27 and ¶28; GASBS 54, ¶34]
.121 [Replace revenues, expenditures with inflows of short-term financial resources or revenues (as appropriate), outflows of short-term financial resources.] [NCGAS 1, ¶21, as amended by GASBS XX, ¶22 and ¶23]
[Revise renumbered footnote 9 as follows:] For purposes of this section, the term balance sheet includes the governmental fund short-term financial resources balance sheet, the proprietary fund statement of fund net position, and the statement of fiduciary net position required to be presented as components of the basic financial statements, as discussed in Section 2200. [GASBI 3, fn1, as amended by GASBS 63, ¶8; GASBS 34, ¶91 and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
.126 [Insert inflows of short-term before financial resources; replace expenditures with outflows of short-term financial resources.] [NCGAS 1, ¶28, as amended by GASBS 6, ¶13 and GASBS XX, ¶22 and ¶23]
[In renumbered footnote 10, replace expenditures with costs.] [GASBS 84, fn1, as amended by GASBS XX, ¶27]
[In renumbered footnote 13, replace expends with uses.] [GASBS 84, fn4, as amended by GASBS XX, ¶27]
.703-1 [Replace expenditures with outflows of resources; replace special revenue fund with special resources fund.] [GASBIG 2016-1, Q4.73, as amended by GASBS XX, ¶27 and ¶28]
.704-1 [Replace expenditures with outflows of resources; replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.49.1, as amended by GASBS XX, ¶27 and ¶28]
.704-3 [Replace expenditures with outflows of resources; replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.2, as amended by GASBS 84, ¶11 and GASBS XX, ¶27 and ¶28]
.704-4 [Replace revenue sharing with resource sharing; replace royalty revenue with royalties; and replace special revenue fund with special resources fund.] [GASBIG 20151, Q7.52.5, as amended by GASBS 84, ¶14 and GASBS XX, ¶27 and ¶28]
.704-5 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.6, as amended by GASBS 84, ¶11 and ¶17 and GASBS XX, ¶28]
.704-6 [In the question, replace special revenue fund with special resources fund; revise the second sentence of the answer as follows:] Because the foundation of the separate fund is a specific committed inflow of short-term financial resources from current activities other than transfers, it can be reported as a special resources fund, provided that the inflows of short-term financial resources are recognized in the separate fund. [GASBIG 2015-1, QZ.54.26, as amended by GASBS XX, ¶22 and ¶28]
.704-7 [In the answer, replace special revenue funds with special resources funds; revise the question as follows:] Are governments required to use special resources funds to report restricted or committed inflows of short-term financial resources from current activities other than transfers? [GASBIG 2015-1, QZ.54.30, as amended by GASBS XX, ¶22 and ¶28]
[Revise Question .704-8 as follows:]
.704-8   Q—Can assigned inflows of short-term financial resources be reported in a special resources fund?
A—Yes. However, the fund is required to also include substantial restricted or committed inflows of short-term financial resources from current activities other than transfers as its foundation. Assigned inflows of short-term financial resources cannot be the foundation for establishing a special resources fund.
[GASBIG 2015-1, QZ.54.31, as amended by GASBS XX, ¶22 and ¶28]
[Revise Question .704-9 as follows:]
.704-9    Q—In order to satisfy the criteria for reporting as a special resources fund, are restricted or committed inflows of short-term financial resources from current activities other than transfers required to constitute a substantial portion of the resources in the fund?
A—The requirement is that restricted or committed inflows of short-term financial resources from current activities other than transfers should comprise a substantial portion of the inflows of the fund. Inflows of the fund would include transfers or assigned inflows of short-term financial resources in addition to restricted or committed inflows of short-term financial resources.
[GASBIG 2015-1, QZ.54.32, as amended by GASBS XX, ¶22 and ¶28]
.704-10 [Replace special revenue fund with special resources fund; replace revenue with inflow of short-term financial resources.] [GASBIG 2015-1, QZ.54.33, as amended by GASBS XX, ¶22 and ¶28]
[Delete Question .704-11; renumber subsequent questions.]
.704-11 [Replace restricted revenue source with restricted source of inflows of short-term financial resources; replace special revenue funds with special resources funds; and replace revenue transfers with inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.35, as amended by GASBS XX, ¶22 and ¶28]
[Revise Question .704-12 as follows:]
.704-12   Q—In addition to its regular general fund corporate levy, a city government levies several dedicated property taxes that can be used only for the purposes set forth in the individual levies. Tax collections from all levies are received in the general fund. Collections from the dedicated levies are recognized as “due to other funds,” rather than inflows of short-term financial resources in the general fund, and distributed to other funds for use in accordance with the specific purposes for which they were levied. Do those distributions constitute restricted inflows of short-term financial resources from current activities other than transfers in the receiving funds so that they can be reported as special resources funds?
A—Yes, the taxes represent restricted inflows of short-term financial resources from current activities other than transfers and a receiving fund could be reported as a special resources fund, provided that the taxes and other restricted or committed inflows of short-term financial resources represent a substantial portion of the inflows into the fund..
[GASBIG 2015-1, QZ.54.36, as amended by GASBS XX, ¶22, ¶27, and ¶28]
.704-13 [Replace special revenue fund with special resources fund; replace revenue with inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.37, as amended by GASBS XX, ¶22 and ¶28]
.704-14 [Replace revenue source with source of inflows of short-term financial resources; replace special revenue fund with special resources fund; replace specific revenue with specific inflow of short-term financial resources from current activities other than transfers; and replace recognized as revenue with recognized as inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.38, as amended by GASBS XX, ¶22 and ¶28]
.704-15 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.39, as amended by GASBS XX, ¶28]
.704-16 [Replace special revenue fund with special resources fund; replace revenues with inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.40, as amended by GASBS XX, ¶22 and ¶28]
.704-17 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.42, as amended by GASBS XX, ¶23]
.704-18 [In the question, replace special revenue fund with special resources fund; revise the answer as follows:] The separate fund does not meet the criteria to be reported as a special resources fund because the source of the resources is transfers. A separate capital projects fund may be reported, but it is not required. [GASBIG 2015-1, QZ.54.43, as amended by GASBS XX, ¶28]
[Delete renumbered Question .704-20; renumber subsequent question.]
.706-1 [Replace expenditures with outflows of resources; replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.2, as amended by GASBS 84, ¶11 and GASBS XX, ¶27 and ¶28]
.706-3 [Replace revenue sharing with resource sharing; replace royalty revenue with royalties; and replace special revenue fund with special resources fund.] [GASBIG 20151, Q7.52.5, as amended by GASBS 84, ¶14 and GASBS XX, ¶27 and ¶28]
.706-4 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.6, as amended by GASBS 84, ¶11 and ¶17 and GASBS XX, ¶28]
.706-5 [In the answer, insert the following at the end of the third sentence:] for claims arising from short-term transactions in the governmental fund or corresponding liability in the proprietary fund [GASBIG 2015-1, Q7.52.7, as amended by GASBS 84, ¶17 and ¶18, GASBS XX, ¶12 and ¶20, and GASBIG 2019-2, Q5.2]
.706-6 [Revise answer as follows.] Escheat property may include amounts that (a) will be paid to heirs or beneficiaries, (b) are temporarily held for other governments, or (c) will revert to the government itself, in the absence of rightful heirs or claimants. A governmental or proprietary fund may be used to account for the entire amount (a, b, and c), with associated liabilities. In a governmental fund, the associated liabilities are for the amounts arising from short-term transactions that will be paid to claimants or other governments. In a proprietary fund, the associated liabilities are the amounts that will be paid to claimants or other governments. Alternatively, a governmental or proprietary fund may be used to account for only the amount that is expected to revert to the government, with the amounts held for claimants and amounts held for other governments accounted for in one or more fiduciary funds, as appropriate. [GASBIG 2015-1, Q7.52.8, as amended by GASBS 84, ¶14 and GASBS XX, ¶12 and ¶20]
.712-1 [Replace under the modified accrual basis of accounting with presented applying the short-term financial resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.59.2, as amended by GASBS XX, ¶12]
.716-7 [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2020-1, Q4.3, as amended by GASBS XX, ¶11]
.716-17 [Replace expenditures with outflows of resources.] [GASBIG 2019-2, Q4.17, as amended by GASBS XX, ¶27]
.716-20 [Replace expenditures with outflows of resources.] [GASBIG 2019-2, Q4.20, as amended by GASBS XX, ¶27]
* * *
REPORTING CAPITAL ASSETS SECTION 1400
Sources: [Add GASBS XX.]
.107 [Replace expenditures made with costs incurred.] [GASBS 34, ¶25, as amended by GASBS XX, ¶27]
.114 [Replace the expenditure with an outflow.] [GASBS 34, ¶80, as amended by GASBS 63, ¶8 and GASBS XX, ¶27]
.120 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBS 89, ¶4, as amended by GASBS XX, fn10]
.121 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, interest cost incurred before the end of a construction period should be recognized as an outflow of short-term financial resources on a basis consistent with governmental fund accounting principles. [GASBS 89, ¶5, as amended by GASBS XX, ¶12 and ¶23]
[In the heading before paragraph .137, replace Current with Short-Term; add the following to the end of the heading:] and Accrual Basis of Accounting
.137 [Replace expenditures with outflows of short-term financial resources; replace prepared using with presented applying; replace current with short-term; and add the following to the end of the paragraph:] and accrual basis of accounting [GASBS 51, ¶19, as amended by GASBS XX, ¶12 and ¶23]
.138 [Replace after nonoperating with as part of other nonoperating.] [GASBS 6, ¶23, as amended by GASBS 34, ¶6 and ¶18; GASBS 34, ¶50 and ¶52; GASBS 34, ¶103, as amended by GASBS 63, ¶8 and GASBS XX, ¶30]
.139 [Replace after nonoperating with as part of other nonoperating.] [GASBS 34, ¶18, as amended by GASBS 72, ¶79 and GASBS 81, ¶27; GASBS 34, ¶50 and ¶52; GASBS 34, ¶103, as amended by GASBS 63, ¶8 and GASBS XX, ¶30]
.146 [Revise the first sentence after the bulleted list as follows:] For purposes of identifying the appropriate implementation phase, revenues includes all inflows of resources from current activities of the primary government’s governmental funds and revenues of enterprise funds, except for unusual or infrequent items as defined in paragraph .145 of Section 1800, “Classification and Terminology.” [GASBS 34, ¶143, as amended by GASBS XX, ¶9 and ¶27]
.159 [Replace expenditures with outflows of resources.] [GASBS 34, ¶160, as amended by GASBS XX, ¶27]
.178 [Replace special item, or extraordinary item with or unusual or infrequent item.] [GASBS 42, ¶17, as amended by GASBS 62, ¶45−¶49, GASBS 63, ¶8, and GASBS XX, ¶9, ¶10, ¶30, and ¶31; GASBS XX, ¶9, ¶10, ¶30, and ¶31]
.182 [In the first sentence, replace an other financing source or extraordinary item with an inflow of resources from noncurrent activities or an unusual or infrequent item; in the fourth sentence, replace extraordinary item with unusual or infrequent item.] [GASBS 42, ¶21, as amended by GASBS XX, ¶10 and ¶27]
.710-1 [Revise the answer as follows:] Actual expenses should be reported applying the economic resources measurement focus and accrual basis of accounting. The estimated amounts produced by the asset management system could be on a different basis. If estimated maintenance and preservation information is not determined applying the economic resources measurement focus and accrual basis of accounting, that basis may be disclosed in a note to RSI. [GASBIG 2015-1, Q7.20.10, as amended by GASBS XX, fn10]
[In heading .719, replace Current with Short-Term; add the following at the end of the heading:] and Accrual Basis of Accounting
.728-1 [Replace made significant expenditures with incurred significant outflows of resources.] [GASBIG 2015-1, Q7.20.8, as amended by GASBS XX, ¶27]
.733-1 [Replace expenditures with outflows of resources.] [GASBIG 2015-1, Q7.107.6, as amended by GASBS XX, ¶27]
.749-1 [Revise the second sentence of the answer as follows:] FEMA grants are nonexchange transactions; should be reported as program revenue in the government-wide financial statements, as inflows of short-term financial resources in governmental fund financial statements, and as nonoperating revenue in enterprise and internal service fund financial statements; and should not be netted against any associated impairment loss. [GASBIG 2015-1, QZ.42.4, as amended by GASBS XX, ¶22]
.749-3 [In the question, replace special item, or extraordinary item with or unusual or infrequent item; in the answer, replace special items or extraordinary items with unusual or infrequent items.] [GASBIG 2015-1, QZ.42.14, as amended by GASBS XX, ¶10]
.749-4 [Replace expenditures with outflows of resources; replace other financing sources or extraordinary items with outflows of resources from current activities or unusual or infrequent items.] [GASBIG 2019-1, Q4.8, as amended by GASBS XX, ¶10 and ¶27]
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REPORTING LIABILITIES SECTION 1500
Sources: [Add GASBS XX; delete GASBI 6.]
[In the Statement of Principle, “Accounting for Long-Term Liabilities,” insert the following before the last sentence:] Long-term debt issued for short-term purposes should be reported as liabilities in governmental funds and in the governmental activities column in the government-wide statement of net position. [NCGAS 1, ¶32, as amended by GASBS 34, ¶69, GASBS 63, ¶8, and GASBS XX, ¶12; NCGAS 1, ¶42, as amended by GASBS 34, ¶69 and GASBS 63, ¶8; GASBS 34, ¶6, as amended by GASBS 84, ¶5; GASBS 34, ¶30, ¶92, and ¶108, as amended by GASBS 63, ¶8; GASBS 34, ¶82, as amended by GASBS 63, ¶8 and GASBS XX, ¶20]
.103 [In the first sentence, replace government with government with the exception of long-term debt issued for short-term purposes; replace noncurrent liabilities with liabilities; and delete that are not current liabilities properly recorded in governmental funds.] [NCGAS 1, ¶43, as amended by NCGAS 4, ¶14, NCGAI 9, ¶12, GASBS 6, ¶17, GASBS 16, ¶13, GASBS 17, ¶6, GASBS 18, ¶10, GASBS 47, ¶3, GASBS 49, ¶9 and ¶24, GASBS 62,¶34−¶43 and ¶96−¶113, GASBS 63, ¶8, GASBS 68, ¶20, ¶48, ¶83, ¶92, ¶97, and ¶120, GASBS 73, ¶25, ¶47, ¶68, and ¶78, GASBS 83, ¶8 and ¶24, GASBS 87, ¶20, ¶35, and ¶36,GASBS XX, ¶12 and ¶20, and GASBI 1, ¶10 and ¶12; GASBS 34, ¶82, as amended by GASBS 63, ¶8 and GASBS XX, ¶20]
[Delete paragraph .104; renumber subsequent paragraphs.]
.105 [Replace expended with used.] [GASBS 62, ¶34, as amended by GASBS 63, ¶8, GASBS 84, ¶5, and GASBS XX, ¶27]
[Replace renumbered paragraphs .115–.120, including the heading before renumbered paragraph .115 and renumbered footnote 14 with the following; renumber subsequent paragraphs and footnotes.]
Recognition of Liabilities Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
.115 Liabilities recognized in governmental fund financial statements are those that arise from short-term transactions and other events that meet the criteria in paragraphs .105 and .106a of Section 1600. In addition, long-term debt issued for short-term purposes is recognized as a liability. Liabilities arising from long-term transactions and other events are recognized when payments to be made become due except for long-term debt issued for short-term purposes, which is recognized as a short-term transaction. Payments to be made that have not yet become due on long-term transactions and other events are general long-term liabilities. [GASBS XX, ¶20]
.116 Examples of long-term debt issued for short-term purposes are tax anticipation notes and revenue anticipation notes with maturities beyond one year from inception of the transaction. [GASBS XX, ¶21]
.118 [Insert with the exception of long-term debt issued for short term-purposes after other long-term liabilities; replace expended with used; and replace be reflected as “Other Financing Sources” with be reported in “Net Flows from Noncurrent Activities”.] [NCGAS 1, ¶107; NCGAS 1, ¶108, as amended by GASBS XX, ¶27; GASBS 34, ¶82, as amended by GASBS 63, ¶8 and GASBS XX, ¶20; GASBS 34, ¶88, as amended by GASBS 37, ¶16; GASBI 1, ¶10, as amended by GASBS 63, ¶8; GASBI 1, ¶12; GASBI 1, ¶13, as amended by GASBS XX, ¶27]
[Delete renumbered paragraphs .119 and .120, including original footnote 14, and the heading before renumbered paragraph .119; renumber subsequent paragraphs.]
.119 [Replace expenditure with an outflow of resources.] [GASBS 54, ¶34, as amended by GASBS XX, ¶27]
.702-3 [Replace under the modified accrual basis of accounting with presented applying the short-term financial resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.59.2, as amended by GASBS XX, ¶12]
.709 [Revise as follows:] Recognition of Liabilities Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
[Delete headings .710 and .711 and the text associated with each and renumber subsequent headings.]
* * *
[Revise the title of Section 1600 as follows:]
MEASUREMENT FOCUS AND BASIS OF ACCOUNTING SECTION 1600
Sources: [Add GASBS XX; delete 1974 ASLGU, NCGAS 4, and GASBI 6.]
[In the Statement of Principle, “Measurement Focus and Basis of Accounting, GovernmentWide Financial Statements,” revise the first sentence as follows:] The government-wide statement of net position and the statement of activities should be presented applying the economic resources measurement focus and accrual basis of accounting. [GASBS 34, ¶16, as amended by GASBS 63, ¶7 and ¶8, GASBS 81, ¶24−¶28, and GASBS XX, fn10]
[Revise the Statement of Principle, “Fund Financial Statements,” as follows:] In fund financial statements, the short-term financial resources measurement focus and accrual basis of accounting or economic resources measurement focus and accrual basis of accounting, as appropriate, should be used in measuring financial position and operating results.
  1. Financial statements for governmental funds should be presented applying the short- term financial resources measurement focus and accrual basis of accounting.
  2. Proprietary fund statements of fund net position and revenues, expenses, and changes in fund net position should be presented applying the economic resources measurement focus and accrual basis of accounting.
  3. Financial statements of fiduciary funds should be presented applying the economic resources measurement focus and accrual basis of accounting. The recognition of certain liabilities of fiduciary funds is discussed in paragraph .132 of this section.
  4. [Insert current subparagraph (d).]
[NCGAS 1, ¶57, as amended by GASBS 6, ¶15 and GASBS XX, ¶12 and fn10; GASBS 34, ¶6; GASBS 34, ¶92, as amended by GASBS 63, ¶8 and GASBS XX, fn10; GASBS 34,¶107, as amended by GASBS 67, ¶20, GASBS 73, ¶115 and ¶116, GASBS 74, ¶26, GASBS84, ¶18 and ¶21, GASBS 92, ¶8, and GASBS XX, fn10; GASBS 84, ¶22, as amended by GASBS 92, ¶9; GASBS XX, ¶12]
.101 [Revise as follows:] “Measurement focus” refers to what items should be reported as elements of financial statements. “Basis of accounting” refers to when inflows of short-term financial resources, revenues, outflows of short-term financial resources, expenses, and transfers—and assets, deferred outflows of resources, liabilities, and deferred inflows of resources—are reported in the financial statements. Specifically, it relates to the timing of the measurements made, regardless of the nature of the measurement, on either the cash or the accrual method. For example, whether depreciation is recognized depends on whether expenses or outflows of short-term financial resources are being measured rather than on whether the cash or accrual basis is used. [NCGAS 1, ¶58, as amended by GASBS 63, ¶7 and GASBS XX, ¶12, ¶22, and ¶23; GASBS XX, ¶12]
[Replace the heading before paragraph .102 with the following:]
Cash, Short-Term Financial Resources, and Economic Resources Measurement Focuses and Cash and Accrual Bases of Accounting
.102 [Revise as follows:] Applying the cash measurement focus and basis of accounting, inflows, including transfers in, are not recognized until cash is received, and outflows, including transfers out, are recognized only when cash is disbursed. The short-term financial resources measurement focus incorporates inflows of short-term financial resources and outflows of short-term financial resources and all short-term financial assets, deferred outflows of resources, liabilities, and deferred inflows of resources, and also reports fund balance. Applying an accrual basis of accounting, elements of financial statements arising from short-term transactions and other events are recognized as they occur, and elements of financial statements arising from long-term transactions or other events are recognized when payments are due. Applying the economic resources measurement focus and accrual basis of accounting, most transactions are recognized when they occur, regardless of when cash is received or disbursed. Items not practicably measurable until cash is received or disbursed are accounted for at that time using either basis of accounting, as may be items whose measurement would be approximately the same applying either basis or that are immaterial. [NCGAS 1, ¶59, as amended by GASBS 34, ¶6 and GASBS XX, ¶12, ¶27, and fn10; GASBS XX, ¶12]
[Replace the heading before paragraph .103 with the following:]
Economic Resources Measurement Focus and Accrual Basis of Accounting Reporting in Government-Wide Financial Statements
.103 [Revise the first sentence as follows:] The statement of net position and the statement of activities should be presented applying the economic resources measurement focus and accrual basis of accounting. [GASBS 34, ¶16, as amended by GASBS 63, ¶7 and ¶8 and GASBS XX, fn10]
[Replace paragraphs .105–.108, including headings and footnotes, with new paragraphs .105–.119, headings, and footnotes as follows; renumber subsequent paragraphs and footnotes.]
Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting in Governmental Fund Statements
.105–.106 [GASBS XX, ¶12–¶13, including fn10–fn11]
.107–.119 [GASBS XX, ¶14–¶26, including headings and fn12]
.120 [Revise the first two sentences as follows:] Interest and dividend income should be recognized on the short-term financial resources measurement focus and accrual basis of accounting. Changes in the fair value of investments should be recognized as inflows of short-term financial resources in the governmental fund statement of short-term financial resource flows at the end of each annual reporting period as discussed in Section I50, “Investments.” [GASBS 31, ¶13 as amended by GASBS XX, ¶11, ¶12, and ¶22; GASBS 72, ¶75]
[Delete original paragraph .110 and the heading before it; renumber subsequent paragraphs.]
[Delete original paragraphs .112–.125, including headings and footnotes; renumber subsequent paragraphs and footnotes.]
[Delete original paragraph .127 and the heading before it; renumber subsequent paragraphs.]
.123 [Replace special revenue funds with special resources funds; replace expenditures with outflows of short-term financial resources.] [NCGAS 1, ¶91, as amended by GASBS XX, ¶27 and ¶28]
[Delete original paragraph .129 and the heading before it; renumber subsequent paragraphs.]
[Revise the heading before renumbered paragraph .124 as follows:]
Economic Resources Measurement Focus and Accrual Basis of Accounting in Proprietary Fund Statements
.124 [Replace using with applying; replace the accrual basis with accrual basis.] [GASBS 34, ¶92, as amended by GASBS 63, ¶8 and GASBS XX, fn10]
[Revise the heading before renumbered paragraph .132 as follows:]
Economic Resources Measurement Focus and Accrual Basis of Accounting in Fiduciary Fund Statements
.132 [Replace reported using with presented applying; replace the accrual basis with accrual basis.] [GASBS 34, ¶107, as amended by GASBS 67, ¶20, GASBS 73, ¶115 and ¶116, GASBS 74, ¶26, GASBS 84, ¶18 and ¶21, GASBS 92, ¶8, and GASBS XX, fn10;
GASBS 84, ¶22, as amended by GASBS 92, ¶9]
.601 [Replace expenditures with outflows of resources.]
[Revise headings .702 and .703 as follows:]
.702 Cash, Short-Term Financial Resources, and Economic Resources Measurement Focuses and Cash and Accrual Bases of Accounting
.703 Economic Resources Measurement Focus and Accrual Basis of Accounting in Government-Wide Financial Statements
[Delete Question .703-1.]
[Revise headings .704 and .705 as follows:]
.704 Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting in Governmental Fund Statements
.705 Application of the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
[Delete heading .707 and its associated text; renumber subsequent headings.]
[Delete original headings .709–.718 and their associated text; renumber subsequent headings.]
[Delete original heading .720 and its associated question and answer; renumber subsequent headings.]
[Delete original heading .722 and its associated text; renumber subsequent headings.]
[Revise renumbered heading .710 as follows:]
.710 Economic Resources Measurement Focus and Accrual Basis of Accounting in Proprietary Fund Statements
[Revise renumbered heading .713 as follows:]
.713 Economic Resources Measurement Focus and Accrual Basis of Accounting in Fiduciary Fund Statements
* * *
THE BUDGET AND BUDGETARY ACCOUNTING SECTION 1700
.103 [Replace expenditure with budgetary outflow of resources.] [NCGAI 10, ¶7, as amended by GASBS XX, ¶27]
.105 [Replace Unexpended with Unused; replace expenditure with budgetary outflow of resources; and replace expenditures with budgetary outflows of resources.] [NCGAS 1, ¶86, as amended by GASBS XX, ¶27]
.108 [Replace revenues and expenditures or expenses (as appropriate) with budgetary inflows of resources and budgetary outflows of resources.] [NCGAS 1, ¶81, as amended by GASBS XX, ¶27]
.112 [Replace expenditure with budgetary outflow of resources; replace revenues with budgetary inflows of resources.] [NCGAS 1, ¶85, as amended by GASBS XX, ¶27]
.114 [In the first sentence, delete basic financial statements or; in subparagraph that addresses Appropriated Budget, replace expenditure with budgetary outflows of resources; and replace revenues with budgetary inflows of resources.] [NCGAI 10, ¶11, as amended by GASBS XX, ¶27; GASBS 34, ¶6; GASBS 34, ¶130, as amended by GASBS XX, ¶34]
.116 [Retain the first sentence and delete the rest of the paragraph.] [NCGAS 1, ¶87, as amended by GASBS XX, ¶12]
.118 [Replace the first three sentences with the following:] Formal budgetary accounting is a management control technique used to assist in controlling budgetary outflows of resources and enforcing budgetary inflows of resource provisions. Although governmental fund accounting is often referred to as “budgetary accounting,” budgetary accounting procedures per se do not affect measurement of inflows of resources and outflows of resources. Budgetary accounting techniques are an extremely important control aspect of accounting for general, special resources, and similar governmental funds, because the annual budget is a legal compliance standard against which the operations of such funds are evaluated. [NCGAS 1, ¶89, as amended by GASBS XX, ¶27 and ¶28]
.119 [Replace special revenue with special resources; replace revenues, expenditures, and transfers with inflows of resources and outflows of resources; and replace expended with used.] [NCGAS 1, ¶90, as amended by GASBS 6, ¶13 and GASBS XX, ¶27 and ¶28]
.120 [Replace basis of accounting with measurement focus and basis of accounting.] [NCGAS 1, ¶78, as amended by GASBS XX, fn10; NCGAS 1, ¶94]
.123 [Replace expenditures with budgetary outflows of resources.] [NCGAS 1, ¶97, as amended by GASBS XX, ¶27]
.125 [Revise the first two sentences as follows:] The budget determines the nature and scope of most governmental fund financial operations by setting the amounts and sources of estimated budgetary inflows of resources, on the one hand, and the amounts and purposes of authorized budgetary outflows of resources, on the other. The accounts of several types of governmental funds record, in summary and detail, both the planned budgetary inflows of resources and budgetary outflows of resources, and the actual transactions. [NCGAS 1, ¶125, as amended by GASBS XX, ¶27]
.127 [Replace special revenue with special resources; replace expenditures with outflows of resources; and replace expenditure with outflow of resources.] [NCGAS 1, ¶91, as amended by GASBS 54, ¶24 and GASBS XX, ¶27 and ¶28]
.707-1 [Replace special revenue with special resources; replace revenues and expenditures with budgetary inflows of resources and budgetary outflows of resources.] [GASBIG 20151, QZ.54.41, as amended by GASBS XX, ¶27 and ¶28]
[Delete Section 800, including headings and paragraph .801.]
* * *
CLASSIFICATION AND TERMINOLOGY SECTION 1800
Sources: [Add GASBS XX.]
[Revise Statement of Principle, “Transfer, Revenue, Expenditure, and Expense Account Classification,” as follows:]
Inflow of Resources and Outflow of Resources Account Classification
a. At a minimum, the statement of activities should present:
(1) Activities accounted for in governmental funds by function, as discussed in paragraph .134, to coincide with the level of detail required in the governmental fund statement of short-term financial resource flows
(2) Activities accounted for in enterprise funds by different identifiable activities.
b. Governmental fund inflows of short-term financial resources should be classified by fund and source. Outflows of short-term financial resources should be classified by fund, function (or program), organization unit, activity, character, and principal classes of objects.
c. Proprietary fund revenues should be reported by major sources. Revenues and expenses should be distinguished as operating, noncapital subsidy, and other nonoperating.
d. Proceeds of general long-term debt issues should be classified separately from other noncurrent inflows of resources in the governmental fund financial statements.
e. Contributions to term and permanent endowments, contributions to permanent fund principal, other capital contributions, unusual or infrequent items, and transfers between governmental and business-type activities should each be reported separately from, but in the same manner as, general revenues in the government-wide statement of activities. In the proprietary fund statement of revenues, expenses, and changes in fund net position, contributions to term and permanent endowments and capital contributions should be reported as other nonoperating revenues and expenses. In proprietary funds, transfers should be reported as noncapital subsidies or as other nonoperating revenues and expenses. In proprietary funds, unusual or infrequent items should be reported separately after other nonoperating revenues and expenses. Transfers should be classified separately from other inflows of resources and other outflows of resources in the governmental fund statement of short-term financial resource flows. Unusual or infrequent items should be reported separately after “net flows from noncurrent activities” in the governmental fund statement of short-term financial resource flows.
[NCGAS 1, ¶99, as amended by GASBS XX, ¶22, ¶23, ¶27, and ¶30; GASBS 34, ¶6, as amended by GASBS XX, ¶27; GASBS 34, ¶53, as amended by GASBS 63, ¶8 and GASBS XX, ¶10; GASBS 34, ¶88, as amended by GASBS XX, ¶9 and ¶27; GASBS 34, ¶89, as amended by GASBS XX, ¶9, ¶10, and ¶27; GASBS 34, ¶100, as amended by GASBS 48, ¶21, GASBS 63, ¶8, and GASBS XX, ¶29; GASBS 34, ¶112, as amended by GASBS 63, ¶8 and GASBS XX, ¶27 and ¶30; GASBS 37, ¶10, as amended by GASBS XX, ¶11; GASBS XX, ¶30]
.101 [Revise as follows:] Use of proper terminology and appropriate classification is essential throughout the budgeting, accounting, and reporting processes. It is especially important that (a) transfers be distinguished from other inflows of short-term financial resources or revenues and other outflows of short-term financial resources or expenses in the basic financial statements, (b) proceeds of general long-term debt issues be distinguished from other governmental fund noncurrent inflows of short-term financial resources, and (c) the terms revenues and expenses, as used in the government-wide financial statements and in proprietary and trust fund financial statements, be distinguished from the terms inflows of short-term financial resources and outflows of short-term financial resources as used in the governmental fund financial statements and that their distinctive meanings be understood by all concerned with governmental budgeting, accounting, and reporting. [NCGAS 1, ¶100, as amended by GASBS 34, ¶6, ¶92, and ¶107 and GASBS XX, ¶22, ¶23, and ¶27; GASBS 34, ¶53; GASBS 34, ¶88, as amended by GASBS XX, ¶27; GASBS 34, ¶112, as amended by GASBS XX, ¶22, ¶23, and ¶27]
.102 [In subparagraph a(1), replace other financing sources or uses with current or noncurrent activities; in other subparagraphs, replace revenues with inflows of short-term financial resources or revenues; replace expenditures with outflows of short-term financial resources; and revise subparagraph b(1) as follows:] Interfund transfers—flows of assets (such as cash or goods) without equivalent flows of assets in return and without a requirement for repayment. This category includes payments in lieu of taxes that are not payments for, and are not reasonably equivalent in value to, services provided. In governmental funds, transfers should be reported as noncurrent activity for transfers related to the purchase of capital assets and repayment of long-term debt except for long-term debt issued for short-term purposes. All other transfers in governmental funds should be reported as current activities. In proprietary funds, transfers should be reported as noncapital subsidies or as other nonoperating revenues and expenses as discussed in paragraphs .113 and .114 of Section P80. [GASBS 34, ¶112, as amended by GASBS 63, ¶8 and GASBS XX, ¶22, ¶23, ¶27, and ¶30]
.113 [Replace expended with used.] [GASBS 62, ¶34, as amended by GASBS 63, ¶8, GASBS 84, ¶5, and GASBS XX, ¶27]
.124 [Replace expended with used; replace reflected as “Other Financing Sources” with reported in “Net Flows from Noncurrent Activities”; and replace as other financing sources and uses with in net flows from noncurrent activities.] [NCGAS 1, ¶108, as amended by GASBS XX, ¶27; GASBS 6, ¶19; GASBS 34, ¶88, as amended by GASBS 37, ¶16 and GASBS XX, ¶27]
.125 [Revise as follows:] For current and advance refundings resulting in defeasance of general long-term debt, the face amount of the new debt should be reported in net flows from noncurrent activities in the fund receiving the proceeds. Payments to the escrow agent from resources provided by the new debt should be reported in net flows from noncurrent activities. Payments to the escrow agent made from other resources of the entity should be reported in net flows from noncurrent activities. (See Section D20, “Debt Extinguishments and Troubled Debt Restructuring.”) [GASBS 7, ¶8, as amended by GASBS 34, ¶82 and ¶88, GASBS 37, ¶16, and GASBS XX, ¶27]
.126 [Replace expenditures with outflows of short-term financial resources; delete when the related liability is incurred.] [GASBS 34, ¶87, as amended by GASBS XX, ¶23]
.127 [Replace other financing uses with net flows from noncurrent activities; replace other financing sources with net flows from noncurrent activities.] [GASBI 1, ¶10; GASBI 1, ¶13, as amended by GASBS XX, ¶27]
.128 [Revise as follows:] Governmental fund lease payments associated with long-term transactions should be accounted for consistent with principles for debt service payments on long-term debt. [GASBS 87, ¶36, as amended by GASBS XX, ¶23]
.130 [Revise as follows:] Sales of capital assets (unless the sale meets the criteria for reporting as an unusual or infrequent item, as defined in paragraph .146), should be reported as inflows of resources from noncurrent activities in governmental funds. [GASBS 34, ¶88, as amended by GASBS XX, ¶9 and ¶27]
[Revise the heading before paragraph .131 as follows:] Classification of Inflows of Resources and Outflows of Resources
.131 [Revise as follows:] Perhaps the most distinctive and significant aspect of governmental fund accounting is that the measurement focus is on inflows, outflows, and balances of fund financial resources. Current activities are all activities other than noncurrent activities. Noncurrent activities are activities related to the purchase and disposal of capital assets and the issuance and repayment of capital-related liabilities (for example, leases) and long-term debt except for long-term debt issued for short-term purposes. [NCGAS 1, ¶109, as amended by GASBS XX, ¶12 and ¶27; GASBS XX, ¶27]
[Revise the heading before paragraph .132 as follows:] Classification of Inflows of Resources
.132 [Replace revenues with inflows of resources; replace revenue source classifications with inflow source classifications.] [NCGAS 1, ¶110, as amended by GASBS XX, ¶27]
[Revise the heading before paragraph .133 as follows:] Classification of Outflows of Resources
.133 [Replace expenditure and expenditures with outflows of resources and replace character, and object class with object class, and into current and noncurrent activities.] [NCGAS 1, ¶111, as amended by GASBS XX, ¶27]
.134 [Replace expenditures with outflows of resources.] [NCGAS 1, ¶112, as amended by GASBS XX, ¶27]
.135 [Replace expenditures with outflows of resources.] [NCGAS 1, ¶113, as amended by GASBS XX, ¶27]
.136 [Replace expenditure with outflow of resources; replace expenditures with outflows of resources; and replace future expenditure with future outflow of resources.] [NCGAS 1, ¶114, as amended by GASBS 34, ¶22, ¶38, and ¶80, and GASBS XX, ¶27]
[Delete paragraph .137; renumber subsequent paragraphs.]
.137 [Revise the first sentence as follows; in the other sentences of the paragraph, replace expenditure classification with outflow of resource classifications and replace expenditure per se with outflows of resources per se.] Outflows of resources should be classified by object classes, that is, according to the types of items purchased or services obtained. [NCGAS 1, ¶116, as amended by GASBS XX, ¶27]
[Insert new paragraph .138 as follows; renumber subsequent paragraphs.]
.138 Current activities are all activities other than noncurrent activities. Noncurrent activities are activities related to the purchase and disposal of capital assets and the issuance and repayment of capital-related liabilities (for example, leases) and long-term debt except for long-term debt issued for short-term purposes. [GASBS XX, ¶27]
.139 [Insert the following at the end of the first sentence:] , as well as separately report noncapital subsidies (a type of nonoperating revenue and expense) [GASBS 34, ¶100, as amended by GASBS XX, ¶29; GASBS XX, ¶29]
.140 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBS 37, ¶10, as amended by GASBS XX, ¶27]
.142 [Replace special or extraordinary with unusual or infrequent; replace paragraphs .145 and .146 with paragraph .146.] [GASBS 34, ¶41, as amended by GASBS XX, ¶9]
[In heading before paragraph .145, replace Extraordinary and Special Items, and Transfers with Transfers, and Unusual or Infrequent Items.]
.145 [Revise the first sentence as follows:] Contributions to term and permanent endowments, contributions to permanent fund principal, transfers (defined in paragraph .102) between governmental and business-type activities, and unusual or infrequent items (defined in paragraph .146) should each be reported separately from, but in the same manner as, general revenues. [GASBS 34, ¶53, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
[In heading before paragraph .146, replace Extraordinary and Special with Unusual or Infrequent.]
[Replace paragraphs .146 and .147 with the following:]
.146–.147 [GASBS XX, ¶9–¶10]
.148 [Revise as follows:] Judgment is required to determine which items should be segregated in the flows statement for the effects of events or transactions that are unusual or infrequent items. An event or transaction should be presumed to be an ordinary and usual activity of the government, unless the evidence clearly supports its classification as an unusual or infrequent item as defined in paragraph .149. [GASBS 62, ¶45, as amended by GASBS XX, ¶9 and ¶10]
.149 [Replace Special and extraordinary items with Unusual or infrequent items; delete or both.] [GASBS 62, ¶46, as amended by GASBS XX, ¶9]
.152 [In the first sentence, replace extraordinary items with unusual or infrequent items; replace or may with and may; and revise the sentences after the lettered list as follows:] In rare situations, an event or transaction may occur that clearly meets one of the criteria specified in paragraph .149 and, thus, gives rise to an unusual or infrequent gain or loss that includes one or more of the gains or losses enumerated above. In these circumstances, gains or losses such as (a) and (c) above, should be reported as an unusual or infrequent item if they are a direct result of a major casualty (such as an earthquake) or a prohibition under a newly enacted law or regulation that clearly meets one or both criteria specified in paragraph .149. However, any portion of such losses that would have resulted from a valuation of assets on a going-concern basis should not be reported as an unusual or infrequent item. [GASBS 62, ¶49, as amended by GASBS XX, ¶9]
[In the heading before paragraph .153, replace Extraordinary and Special with Unusual or Infrequent.]
.153 [Revise as follows:] In governmental fund statements of short-term financial resource flows, unusual or infrequent items (defined in paragraph .146) should be reported individually after “net flows from noncurrent activities.” If more than one occurs during the same period, unusual or infrequent items should be reported individually within an “unusual or infrequent items” classification. (Because inflows of short-term financial resources and outflows of short-term financial resources, rather than gains or losses, are reported for debt refundings in governmental funds, these transactions should not be reported as unusual or infrequent items in governmental funds.) Unusual or infrequent items in the proprietary fund statement of revenues, expenses, and changes in fund net position should be reported individually as the last presented flow of resources prior to the net change in resource flows. [GASBS 34, ¶89, as amended by GASBS XX, ¶9, ¶10, ¶22, ¶23, and ¶27; GASBS 34, ¶100, as amended by GASBS 63, ¶8 and GASBS XX, ¶10; GASBS XX, ¶10]
.167 [Revise as follows:] The nonspendable fund balance classification includes interfund loans receivable arising from long-term events and amounts that are legally or contractually required to be maintained intact. However, if the use of the proceeds from the collection of those receivables is restricted, committed, or assigned, then they should be included in the appropriate fund balance classification (restricted, committed, or assigned), rather than nonspendable fund balance. The corpus (or principal) of a permanent fund is an example of an amount that is legally or contractually required to be maintained intact. [GASBS 54, ¶6, as amended by GASBS XX, ¶12 and ¶19]
.172 [Replace revenue with inflows of short-term financial resources.] [GASBS 54, ¶11, as amended by GASBS XX, ¶22]
.176 [Replace special revenue with special resources.] [GASBS 54, ¶15, as amended by GASBS XX, ¶28]
.177 [Replace expected expenditures over expected revenues with budgetary outflows of resources over budgetary inflows of resources.] [GASBS 54, ¶16, as amended by GASBS XX, ¶27]
.178 [Replace expenditures with outflows of short-term financial resources.] [GASBS 54, ¶17, as amended by GASBS XX, ¶23]
.179 [Replace expenditure with outflow of short-term financial resources; replace expenditures with outflows of short-term financial resources.] [GASBS 54, ¶18, as amended by GASBS XX, ¶23]
.180 [Replace expenditures with outflows of short-term financial resources.] [GASBS 54, ¶19, as amended by GASBS XX, ¶23]
.181 [Delete revenue shortages or; replace budget or revenue stabilization with budget stabilization; replace expended with used; and in the last sentence, replace revenue with budgetary.] [GASBS 54, ¶20, as amended by GASBS XX, ¶27]
[In footnote 22, delete revenue stabilization,.] [GASBS 54, fn1, as amended by GASBS XX, ¶27]
.182 [Replace special revenue fund with special resources fund; replace revenue source with source of inflows of short-term financial resources from current activities other than transfers.] [GASBS 54, ¶21, as amended by GASBS XX, ¶28]
[In the heading before paragraph .183, replace Balance Sheets with Short-Term Financial Resources Balance Sheets.]
.183 [Replace (a) not in spendable form and (b) with interfund loans receivable arising from long-term events and amounts that are.] [GASBS 54, ¶22, as amended by GASBS XX, ¶12]
.184 [Replace the notes to the financial statements with notes to financial statements; replace spent with used; and replace expenditure with outflow of short-term financial resources.] [GASBS 54, ¶23, as amended by GASBS XX, ¶23]
.186 [Replace balance sheet with short-term financial resources balance sheet.] [GASBS 54, ¶25, as amended by GASBS XX, ¶11]
.190 [Replace revenues and transfers in with budgetary inflows of resources; replace expenditures and transfers out with budgetary outflows of resources; and replace planned revenues, expenditures, and transfers with budgetary inflows of resources, budgetary outflows of resources.] [NCGAS 1, ¶125, as amended by GASBS XX, ¶27]
.702-2 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.4, as amended by GASBS XX, ¶23]
.702-3 [In the question, replace federal reimbursement with federal payment, replace expenditures with costs, and delete, or revenue and expense; in the answer, replace revenue or expense from the grant with inflows of short-term financial resources/revenue or outflows of short-term financial resources/expenses from the grant; and in the last sentence, replace revenue with inflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.5, as amended by GASBS XX, ¶22 and ¶23]
.702-5 [Replace under the modified accrual basis of accounting with presented applying the short-term financial resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.59.2, as amended by GASBS XX, ¶12]
.702-9 [Replace revenues and expenditures with inflows of short-term financial resources/revenues and outflows of short-term financial resources/expenses.] [GASBIG 2015-1, Q7.82.2, as amended by GASBS XX, ¶22 and ¶23]
.702-10 [Replace a revenue with an inflow of short-term financial resources.] [GASBIG 2015-1, Q7.82.3, as amended by GASBS XX, ¶22]
.703-8 [Replace revenues with inflows of short-term financial resources or revenues; replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.11, as amended by GASBS XX, ¶22 and ¶23]
.703-17 [Revise the answer as follows:] The amount would be reported in the same fashion as other sales to outsiders—that is, as a direct expense or as a general revenue—or if “unusual or infrequent,” as an unusual or infrequent item. [GASBIG 2015-1, Q7.47.22, as amended by GASBS XX, ¶9 and ¶10]
.707-1 [Replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q7.22.2, as amended by GASBS XX, ¶28]
[Replace heading .720 with the following:] Classification of Inflows of Resources and Outflows of Resources
[Replace heading .721 with the following:] Classification of Inflows of Resources
[Replace heading .722 with the following:] Classification of Outflows of Resources
.724-1 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.26.1, as amended by GASBS XX, ¶11]
.725-1 [Replace city-wide vehicle maintenance expenditures with outflows of short-term financial resources for city-wide vehicle maintenance.] [GASBIG 2015-1, Q7.28.1, as amended by GASBS XX, ¶23]
.726-6 [Replace capital expenditures with capital outlays.] [GASBIG 2015-1, Q7.39.4, as amended by GASBS XX, ¶27]
[In heading .728, replace Special and Extraordinary Items, and Transfers with Transfers, and Unusual or Infrequent Items.]
.728-1 [Replace revenue with an inflow of short-term financial resources.] [GASBIG 20151, Q7.42.1, as amended by GASBS XX, ¶22]
[In heading .729, replace Extraordinary and Special with Unusual or Infrequent.]
[Delete Questions .729-1 and .729-2.]
[In heading .730, replace Extraordinary and Special with Unusual or Infrequent.]
.730-1 [Replace special and extraordinary and extraordinary and special with unusual or infrequent.] [GASBIG 2015-1, Q7.67.1, as amended by GASBS XX, ¶9 and ¶10]
.730-2 [In the question, replace a special or extraordinary with an unusual or infrequent; revise the answer as follows:] Yes. For example, assume that a government sold a significant governmental capital asset for a large amount, but at a negligible gain or loss. Significant proceeds from the sale would be reported in the governmental fund financial statements; however, because the gain or loss is insignificant, it would not be reported as an unusual or infrequent item in the statement of activities. On the other hand, the reverse situation—a transaction is an unusual or infrequent item in the statement of activities but not in the fund financial statements—also could occur. For example, a local government assumes the debt of another organization, either because it is required to as a guarantor, or because it chooses to under a “moral” obligation. Because this debt arises from a long-term transaction, the debt would be recognized as payments become due. There is no unusual or infrequent item required to be reported in the statement of short-term financial resource flows. In the statement of activities, however, the event results in a change in net position and would be reported. [GASBIG 2015-1, Q7.67.2, as amended by GASBS XX, ¶9, ¶11, and ¶23]
[Delete Question .730-3.]
.733-3 [Replace balance sheet date with short-term financial resources balance sheet date.] [GASBIG 2015-1, Q7.23.2, as amended by GASBS XX, ¶11]
.737-1 [Revise the second sentence of the question as follows:] (See paragraphs .142 and .197 of Section 2200, for example.) [GASBIG 2015-1, Q7.24.6, as amended by GASBS XX, ¶29 and ¶30]
[Delete Questions .742-2 and .742-4; renumber subsequent questions.]
.742-3 [Replace receivables or the sale of properties held for resale with interfund loans receivable.] [GASBIG 2015-1, QZ.54.5, as amended by GASBS XX, ¶12]
[Delete renumbered Questions .742-4–.742-6.]
.743-1 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.8, as amended by GASBS XX, ¶28]
.743-2 [Replace special revenue fund with special resources fund; replace a restricted revenue source with inflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.9, as amended by GASBS XX, ¶22 and ¶28]
.743-3 [Replace basis of accounting with measurement focus.] [GASBIG 2015-1, QZ.54.10, as amended by GASBS XX, ¶12]
.743-5 [Replace special revenue fund with special resources fund; replace grant revenues with inflows of short-term financial resources from grants.] [GASBIG 2015-1, QZ.54.59, as amended by GASBS XX, ¶22 and ¶28]
.743-6 [Revise the question as follows:] A special resources fund is used by a local government to account for an inflow of short-term financial resources that is restricted by state statute to be spent for a specific purpose. At year end, the entire fund balance is classified as restricted. Next year’s budget projects an excess of budgetary outflows over budgetary inflows, causing the government to include a portion of existing fund balance as a budgetary resource. Should the amount necessary to balance the budget be classified as assigned? [GASBIG 2015-1, QZ.54.60, as amended by GASBS XX, ¶22, ¶27, and ¶28]
.744-1 [Replace current-period revenues with current-period inflows of short-term financial resources; replace future revenues with future resources.] [GASBIG 2015-1, QZ.54.11, as amended by GASBS 87, ¶20 and GASBS XX, ¶22]
.744-5 [Replace appropriated expenditures with budgetary outflows; replace budgeted revenues with budgeted inflows.] [GASBIG 2015-1, QZ.54.63, as amended by GASBS XX, ¶27]
.745-1 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.12, as amended by GASBS XX, ¶28]
.745-2 [Replace budgeted revenues and other financing sources with budgeted resources; replace expected expenditures over expected revenues with expected budgetary outflows over expected budgetary inflows.] [GASBIG 2015-1, QZ.54.13, as amended by GASBS XX, ¶27]
.745-4 [Replace less revenue with less resources; replace excess of expenditures over expected revenues with excess of budgetary outflows over expected budgetary inflows.] [GASBIG 2015-1, QZ.54.54, as amended by GASBS XX, ¶27]
.745-5 [Replace budgets revenues with budgets inflows; replace appropriations over revenues with appropriations over budgetary inflows of resources; and replace expected expenditures over expected revenues with budgetary outflows over budgetary inflows.] [GASBIG 2015-1, QZ.54.56, as amended by GASBS XX, ¶27]
.745-6 [Revise the question as follows:] A special resources fund is used by a local government to account for an inflow of short-term financial resources that is restricted by state statute to be spent for a specific purpose. At year end, the entire fund balance is classified as restricted. Next year’s budget projects an excess of budgetary outflows over budgetary inflows, causing the government to include a portion of existing fund balance as a budgetary resource. Should the amount necessary to balance the budget be classified as assigned? [GASBIG 2015-1, QZ.54.60, as amended by GASBS XX, ¶22, ¶27, and ¶28]
.747-2 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.16, as amended by GASBS XX, ¶23]
.747-3 [Revise the last sentence of the answer as follows:] Committed fund balances should not be reduced by outflows of short-term financial resources exceeding resources that are committed or assigned to other purposes in that fund. [GASBIG 2015-1, QZ.54.17, as amended by GASBS XX, ¶23]
[Delete Question .747-4; renumber subsequent questions.]
.747-4 [Replace expenditures with outflows of short-term financial resources; replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.19, as amended by GASBS XX, ¶23 and ¶28]
.747-5 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.50, as amended by GASBS XX, ¶28 and GASBIG 2016-1, Q5.41]
.747-7 [Replace expenditures with outflows of resources; replace they are not revenues with they are not inflows of short-term financial resources from current activities other than transfers; replace special revenue fund with special resources fund; replace tax revenues with tax inflows of short-term financial resources; replace use of the revenues with use of the inflows; and delete the last sentence of the answer.] [GASBIG 2015-1, QZ.54.57, as amended by GASBS XX, ¶12, ¶22, ¶23, and ¶28]
.747-8 [Replace special revenue fund with special resources fund; replace grant revenues with inflows of short-term financial resources from grants.] [GASBIG 2015-1, QZ.54.59, as amended by GASBS XX, ¶22 and ¶28]
.747-9 [Revise the question as follows:] A special resources fund is used by a local government to account for an inflow of short-term financial resources that is restricted by state statute to be spent for a specific purpose. At year end, the entire fund balance is classified as restricted. Next year’s budget projects an excess of budgetary outflows over budgetary inflows, causing the government to include a portion of existing fund balance as a budgetary resource. Should the amount necessary to balance the budget be classified as assigned? [GASBIG 2015-1, QZ.54.60, as amended by GASBS XX, ¶22, ¶27, and ¶28]
.748-1 [Replace expended with used; replace revenues with inflows of short-term financial resources; and replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.23, as amended by GASBS XX, ¶22, ¶23, and ¶27]
.748-2 [Replace revenues with inflows of short-term financial resources.] [GASBIG 20151, QZ.54.24, as amended by GASBS XX, ¶22]
[In heading .749, replace Balance Sheets with Short-Term Financial Resources Balance Sheets.]
.749-1 [Replace those that are not in spendable form with interfund loans receivable; replace resources not in spendable form with interfund loans receivable; and replace Inventories and prepaid amounts with Long-term portion of interfund loans.] [GASBIG 2015-1, QZ.54.6, as amended by GASBS XX, ¶12 and ¶26]
.752-1 [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2015-1, QZ.54.27, as amended by GASBS XX, ¶11]
.752-4 [Replace special revenue fund with special resources fund and replace grant revenues with inflows of short-term financial resources from grants.] [GASBIG 2015-1, QZ.54.59, as amended by GASBS XX, ¶22 and ¶28]
.755-1 [Replace expended with used; replace revenues with inflows of short-term financial resources; and replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.23, as amended by GASBS XX, ¶22, ¶23, and ¶27]
.801 [Replace measurement focus with measurement focus and accrual basis of accounting.] [AICPA SLG 2002, ¶5.26]
.802 [Replace current financial resources measurement focus with short-term financial resources measurement focus and accrual basis of accounting and replace economic resources measurement focus with economic resources measurement focus and accrual basis of accounting.] [AICPA SLG 2002, ¶5.26]
* * *
DEFINING THE FINANCIAL REPORTING ENTITY SECTION 2100
.131 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses and replace capital expenditures with outflows of short-term financial resources for capital outlays.] [GASBS 14, ¶31, as amended by GASBS XX, ¶22 and ¶23]
.139 [Replace expenditures with outflows of short-term financial resources.] [GASBS 14, ¶38, as amended by GASBS 61, ¶6 and GASBS XX, ¶23]
.506 [Revise the definition as follows:] The method of reporting financial data of component units in columns and rows separate from the financial data of the primary government. An integral part of this method of presentation is that major component unit supporting information is required to be presented in a separate column in the reporting entity’s statements of net position and activities if it does not reduce the readability of the statements. If presenting each major component unit in a separate column in the reporting entity’s statements of net position and activities reduces the readability of the statements, combining statements of major component units should be included in the reporting entity’s basic financial statements after the fund financial statements. [2600.107] [GASBS 14, ¶131, as amended by GASBS 34, ¶6 and ¶126, GASBS 63, ¶8, and GASBS XX, ¶33; GASBS 34, ¶14]
* * *
COMPREHENSIVE ANNUAL FINANCIAL REPORT SECTION 2200
Sources: [Add GASBS XX.]
.101 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .110–.204 with paragraphs .111–.207; and update other cross-references for renumbering.] [NCGAS 1, ¶135 and ¶139, as amended by GASBS 14 and GASBS 34, ¶80 and ¶82; GASBS 14, ¶11, ¶19, ¶44, and ¶50; GASBS 34, ¶6, as amended by GASBS XX, ¶4–¶11, and ¶30–¶32; GASBS 34, ¶15, ¶126, and fn36; GASBS XX, ¶4–¶11, ¶27, ¶29–¶32, and ¶34]
.102 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace prepared using the economic resources measurement focus and the accrual basis of accounting with presented applying the economic resources measurement focus and accrual basis of accounting; replace paragraphs .110–.156 with paragraphs .111–.157; replace paragraphs .151–.179 with paragraphs .158–.203; and replace paragraphs .205–.207 with paragraphs .208–.210.] [GASBS 34, ¶6, as amended by GASBS 84, ¶5 and GASBS XX, ¶4–¶11, ¶30– ¶32, and fn10; GASBS XX, ¶4–¶11, ¶27, ¶29–¶32, and ¶34]
.105 [In subparagraph (b), replace Balance sheet with Short-term financial resources balance sheet and replace Statement of revenues, expenditures, and changes in fund balances with Statement of short-term financial resource flows. In subparagraph 5(c)(iii), replace revenue with inflow of resources and expenditure with outflow of resources.] [NCGAS 1, ¶139, as amended by GASBS 6, ¶25, GASBS 34, ¶80, ¶82, and ¶130, GASBS 63, ¶8, GASBS 84, ¶14−¶18, and GASBS XX, ¶27; GASBS 14, ¶19 and ¶50; GASBS 34, ¶6, ¶75, and ¶96 and fn35, fn36, fn49, and fn50; GASBS 34, ¶12 and ¶16, as amended by GASBS 63, ¶8 and GASBS 84, ¶5; GASBS 34, ¶91, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
[Replace paragraphs .106–.109, including footnotes, with the following; renumber subsequent paragraphs and footnotes.]
.106–.110 [GASBS XX, ¶4–¶8, including GASBS XX, fn2–fn9]
.127 [Replace special and extraordinary items, and transfers with transfers, and unusual or infrequent items.] [GASBS 34, ¶38, as amended by GASBS 63, ¶8 and GASBS XX, ¶10; GASBS 37, ¶11]
.128 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resources.] [GASBS 37, ¶10, as amended by GASBS XX, ¶11]
.130 [Replace special or extraordinary items with unusual or infrequent items; replace paragraphs .143 and .144 with paragraph .144.] [GASBS 34, ¶41, as amended by GASBS XX, ¶9]
.139 [Replace expenditures with outlays.] [GASBS 34, ¶50, as amended by GASBS XX, ¶27]
[In the heading before paragraph .142, replace special and extraordinary items, and transfers with transfers, and unusual or infrequent items.]
.142 [Revise the first sentence as follows:] Contributions to term and permanent endowments, contributions to permanent fund principal, transfers between governmental and business-type activities (defined in paragraph .102 of Section 1800), and unusual or infrequent items (defined in paragraph .144 of this section) should each be reported separately from, but in the same manner as, general revenues. [GASBS 34, ¶53, as amended by GASBS 63, ¶8 and GASBS XX, ¶9 and ¶10]
.143 [In the table, replace special items with unusual or infrequent items; switch the line for transfers with the line for unusual or infrequent items; and replace special items, and transfers with transfers, and unusual or infrequent items.] [GASBS 34, ¶54, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
[Replace paragraphs .144 and .145, including the heading before paragraph .144, with the following:]
Unusual or Infrequent Items
.144–.145 [GASBS XX, ¶9–¶10]
.146 [Revise as follows:] Judgment is required to determine which items should be segregated in the flows statement for the effects of events or transactions that are unusual or infrequent items. An event or transaction should be presumed to be an ordinary and usual activity of the government, unless the evidence clearly supports its classification as an unusual or infrequent item as defined in paragraph .147. [GASBS 62, ¶45, as amended by GASBS XX, ¶9 and ¶10]
.147 [Revise the first two sentences as follows:] Unusual or infrequent items are events and transactions that are distinguished either by their unusual nature or by the infrequency of their occurrence. The following criteria identify when an event or transaction is either unusual in nature or infrequent in occurrence: [GASBS 62, ¶46, as amended by GASBS XX, ¶9]
.150 [In the first sentence, replace extraordinary items with unusual or infrequent items; replace or may with and may; and revise the sentences after the lettered list as follows:] In rare situations, an event or transaction may occur that clearly meets one or both criteria specified in paragraph .147 and, thus, gives rise to an unusual or infrequent gain or loss that includes one or more of the gains or losses enumerated above. In these circumstances, gains or losses such as (a) and (c) above, should be reported as an unusual or infrequent item if they are a direct result of a major casualty (such as an earthquake) or a prohibition under a newly enacted law or regulation that clearly meets one or both criteria specified in paragraph .147. However, any portion of such losses that would have resulted from a valuation of assets on a going-concern basis should not be reported as an unusual or infrequent item. [GASBS 62, ¶49, as amended by GASBS XX, ¶9]
.151 [Replace special or extraordinary with unusual or infrequent; replace extraordinary or special with unusual or infrequent.] [GASBS 62, ¶50, as amended by GASBS XX, ¶9]
.160 [Replace revenues with inflows of short-term financial resources/revenues; replace expenditures with outflows of short-term financial resources.] [GASBS 34, ¶76, as amended by GASBS 65, ¶33, and GASBS XX, ¶22 and ¶23; GASBS 37, ¶15, as amended by GASBS 65, ¶33]
[Revise footnote 31 as follows:] Excluding inflows of short-term financial resources/revenues and outflows of short-term financial resources/expenses reported as unusual or infrequent items. [GASBS 34, fn37, as amended by GASBS XX, ¶9, ¶22, and ¶23]
.162 [Replace with GASBS XX, ¶11]
[In heading before paragraph .163, insert Short-Term Financial Resources before Balance Sheet.]
.163 [Replace balance sheet with short-term financial resources balance sheet; replace current with short-term.] [GASBS 34, ¶83, as amended by GASBS 63, ¶12 and GASBS XX, ¶11 and ¶12; GASBS 63, ¶7]
.164 [Replace (a) not in spendable form and (b) with interfund loans receivable and amounts that are; replace balance sheet with short-term financial resources balance sheet.] [GASBS 54, ¶22, as amended by GASBS XX, ¶12 and ¶26; GASBS 54, ¶25, as amended by GASBS XX, ¶11]
.165 [Replace expenditures with outflows of resources; delete and payable; and delete the third bullet.] [GASBS 34, ¶85, as amended by GASBS 63, ¶8, GASBS 65, ¶31, and GASBS XX, ¶12, ¶24, and ¶27]
[Replace paragraphs .166–.170, including headings and footnotes, with new paragraphs
.166–.171 as follows; renumber subsequent paragraphs:]
Statement of Short-Term Financial Resource Flows
.166 The statement of short-term financial resource flows should report information about the inflows, outflows, and balances of short-term financial resources of each major governmental fund and for the nonmajor governmental funds in the aggregate. A total column should be presented. Governments should present unusual or infrequent items separately as the last presented flow of resources prior to the net change in resource flows in the governmental funds statement of resource flows. The statement should present the following information in the following sequence, using the all-inclusive format indicated:
View image
Each caption, subtotal, and total shown in the format above should be presented, as applicable. Current activities are all activities other than noncurrent activities. Noncurrent activities are activities related to the acquisition and disposal of capital assets and the issuance and repayment of capital-related liabilities (for example, leases) and long-term debt, except for long-term debt issued for short-term purposes. [GASBS 34, ¶86, as amended by GASBS XX, ¶11, ¶12, and ¶27; GASBS XX, ¶10 and ¶27]
Classification of inflows of resources and outflows of resources
.167 Governmental fund inflows of resources should be classified in the statement of shortterm financial resource flows by major source as discussed in paragraph .131 of Section 1800. Governmental fund outflows of resources should be classified at a minimum by function, as discussed in paragraphs .132−.137 of that section. Debt issue costs paid out of debt proceeds, such as underwriter fees, should be reported as outflows of resources. Issue costs, such as attorney and rating agency fees or bond insurance, paid from existing resources should be reported as outflows of resources. [GASBS 34, ¶87, as amended by GASBS XX, ¶11 and ¶27; GASBS XX, ¶27]
Noncurrent activities
.168 Noncurrent activities are activities related to the acquisition and disposal of capital assets and the issuance and repayment of capital-related liabilities (for example, leases) and long-term debt, except for long-term debt issued for short-term purposes. [GASBS XX, ¶27]
.169 Items that should be reported as inflows and outflows of resources from noncurrent activities include the face amount of long-term debt, issuance premium or discount, certain payments to escrow agents for bond refundings, transfers, and sales of capital assets (unless the sale meets the criteria, as defined in paragraph .144, for reporting as an unusual or infrequent item). [GASBS 34, ¶88, as amended by GASBS 37, ¶16 and GASBS XX, ¶9 and ¶27]
Unusual or infrequent items
.170 Unusual or infrequent items, defined in paragraph .144, should be reported separately after “net flows from noncurrent activities.” If more than one occurs during the same period, unusual or infrequent items should be reported individually within an “unusual or infrequent items” classification. (Because inflows of short-term financial resources and outflows of short-term financial resources, rather than gains or losses, are reported for debt refundings in governmental funds, these transactions should not be reported as unusual or infrequent items.) [GASBS 34, ¶89, as amended by GASBS XX, ¶9, ¶10, ¶22, ¶23, and ¶27; GASBS XX, ¶10]
Required reconciliation
.171 Paragraph .161 requires governments to present a summary reconciliation at the bottom of the fund financial statements or in an accompanying schedule. Items that typically will be required to reconcile the total change in governmental fund balances to the change in net position of governmental activities in the statement of activities include, but are not limited to, the effects of:
  • Reporting revenues applying the economic resources measurement focus and accrual basis of accounting in the statement of activities and reporting inflows of resources applying the short-term financial resources measurement focus and accrual basis of accounting in the fund financial statements
  • Reporting annual depreciation expense instead of outflows of resources for capital outlays
  • Reporting long-term debt proceeds in the statement of net position as liabilities instead of inflows of resources; also, reporting debt principal payments in the statement of net position as reductions of liabilities instead of outflows of resources
  • Reporting other expenses applying the economic resources measurement focus and accrual basis of accounting in the statement of activities and reporting outflows of resources applying the short-term financial resources measurement focus and accrual basis of accounting in the fund financial statements
  • Adding the net revenue (expense) of internal service funds, as discussed in paragraph .157.
[GASBS 34, ¶90, as amended by GASBS 63, ¶8 and GASBS XX, ¶12, ¶27, and fn10]
.183 [Replace required to be expended with required to be used.] [GASBS 62, ¶34, as
amended by GASBS 63, ¶8, GASBS 84, ¶5, and GASBS XX, ¶27]
.193 The operating statement for proprietary funds is the statement of revenues, expenses, and changes in fund net position. Revenues should be reported by major source. This statement also should distinguish between operating and nonoperating revenues and expenses (as discussed in paragraph .195), as well as separately report noncapital subsidies (a type of nonoperating revenue and expense). Governments should present unusual or infrequent items individually as the last presented flow(s) of resources prior to the net change in resource flows in the proprietary funds statements of resource flows. [GASBS 34, ¶100, as amended by GASBS 48, ¶21, GASBS 63, ¶8, and GASBS XX, ¶29; GASBS XX, ¶10 and ¶29]
.194 [Revise as follows:] The statement of revenues, expenses, and changes in fund net position should present the following information in the following sequence, using the allinclusive format indicated:
View image
Each caption, subtotal, and total shown in format above should be presented, as applicable. [GASBS XX, ¶30]
[Replace paragraphs .195 and .196, including headings and current footnote 45, with the following; renumber subsequent footnotes.]
Definition of operating revenues and expenses and description of nonoperating revenues and expenses
.195 [GASBS XX, ¶31]
Definition of subsidies
.196 [GASBS XX, ¶32]
.197 [Delete the second sentence.] [GASBS 34, ¶103, as amended by GASBS 63, ¶8 and ¶9 and GASBS XX, ¶31]
.208 [Replace paragraphs .106–.109 with paragraphs .106–.110.] [GASBS 34, ¶6, as amended by GASBS XX, ¶4–¶8; GASBS 34, ¶129, as amended by GASBS 67, ¶32−¶34, GASBS 68, ¶46, ¶47, ¶81, ¶82, ¶114, ¶115, and ¶117, GASBS 73, ¶45, ¶46, ¶66, ¶93, ¶94, ¶96, ¶115, and ¶116, GASBS 74, ¶36−¶38 and ¶59, GASBS 75, ¶57, ¶97, ¶134, ¶137, ¶170, ¶191, ¶218, and ¶221, and GASBS XX, ¶4–¶8]
.209 [Replace the first two sentences, including current footnote 51, with the following:] Budgetary comparison schedules should be presented as RSI for the general fund and for each major special resources fund that has a legally adopted annual budget.
[In the remainder of the paragraph, replace special revenue fund with special resources fund and replace the last two sentences before subparagraph (a) with the following:] Separate columns for the variances between (a) original and final budget amounts and (b) final budget amounts and actual budget results are required to be presented. An analysis of significant variations between original and final budget amounts and final budget amounts and actual budget results also is required to be presented in notes to RSI. The analysis should include any currently known reasons for those variations that are expected to have a significant effect on budgetary fund balance or to produce significant differences from current period budgetary results. [GASBS 34, ¶130, as amended by GASBS 41, ¶3 and GASBS XX, ¶28 and ¶34; GASBS XX, ¶34]
[In footnote 52, replace special revenue fund with special resources fund.] [GASBS 41, ¶3, as amended by GASBS XX, ¶28]
[In footnote 53, replace expenditure with budgetary outflows of resources; replace revenues with budgetary inflows of resources.] [GASBS 34, fn55, as amended by GASBS XX, ¶27]
.210 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows; replace excesses of expenditures with excesses of budgetary outflows of resources; and delete current footnote 54 and renumber subsequent footnotes.] [GASBS 34, ¶131, as amended by GASBS 37, ¶19 and GASBS XX, ¶11 and ¶27; GASBS 37, ¶19, as amended by GASBS XX, ¶27]
.211 [In subparagraphs (a) and (b), replace balance sheets with short-term financial resources balance sheets; replace statements of revenues, expenditures, and changes in fund balances with statements of short-term financial resource flows.] [NCGAS 1, ¶143 and ¶147, as amended by GASBS 34, ¶12, ¶80, ¶82, ¶86, ¶91, ¶106, ¶107, ¶112, and ¶130, GASBS 63, ¶8, GASBS 84, ¶23, and GASBS XX, ¶11; GASBS 9, ¶6; GASBS 34, ¶75 and ¶96 and fn35 and fn36]
.212 [Revise the sources as follows:] GASBS 14, ¶50; GASBS 34, ¶126, as amended by GASBS 63, ¶8; GASBS 37, ¶18; GASBS XX, ¶33
.213 [Replace expenditures with outflows of resources.] [NCGAS 1, ¶131, as amended by GASBS XX, ¶27]
.218 [Revise the second sentence as follows:] Governments should present each major component unit in a separate column in the reporting entity’s statements of net position and activities, if it does not reduce the readability of the statements. If presenting each major component unit in a separate column in the reporting entity’s statements of net position and activities reduces the readability of the statements, combining statements of major component units should be included in the reporting entity’s basic financial statements after the fund financial statements. [GASBS 34, ¶126, as amended by GASBS 37, ¶18, GASBS 63, ¶8, and GASBS XX, ¶33; GASBS 37, ¶18, as amended by GASBS 63, ¶8; GASBS XX, ¶33]
[Delete current paragraph .216 and current footnote 59.]
.219 [Revise as follows:] The notes to financial statements should disclose, for each major component unit, the nature and amount of significant transactions with the primary government and other component units. [GASBS 34, ¶128, as amended by GASBS XX, ¶33]
.703-1 [Revise the sources as follows:] GASBIG 2015-1, Q7.5.1, as amended by GASBS XX, ¶4
.704-1 [Replace paragraph .109h with paragraph .110e.] [GASBIG 2015-1, Q7.5.2, as amended by GASBS XX, ¶8 and fn3 and GASBIG 2016-1, Q5.10]
.704-2 [Replace paragraph .108 with paragraph .109.] [GASBIG 2015-1, Q7.5.3, as amended by GASBS XX, ¶7]
.704-4 [Replace paragraph .109 with paragraph .110.] [GASBIG 2015-1, Q7.5.6, as amended by GASBS XX, ¶8]
.704-5 [Replace paragraph .109 with paragraph .110; replace subparagraphs a–h with subparagraphs a–e; and replace paragraph .109h with paragraph .110e.] [GASBIG 20151, Q7.5.7, as amended by GASBS XX, ¶8]
[Delete Question .704-6; renumber subsequent questions.]
.704-6 [Revise the question as follows; in the answer, replace paragraph .109a with paragraph .110a, replace expenditures with outlays, and replace readers with users.] Paragraph .110a of this section requires MD&A to provide information about significant differences in the type of information the financial statements provide. How might governments meet this requirement? [GASBIG 2015-1, Q7.5.9, as amended by GASBS XX, ¶8 and ¶27]
.704-7 [Replace paragraph .109b with paragraph .110b.] [GASBIG 2015-1, Q7.5.10, as amended by GASBS XX, ¶5 and ¶8]
[Delete current Question .704-9; renumber subsequent questions.]
.704-8 [Replace paragraph .109f with paragraph .110 d( 2).] [GASBIG 2015-1, Q7.5.12, as amended by GASBS XX, ¶8]
.704-9 [Replace paragraph .109h with paragraph .110e; replace of the auditor’s report with the financial statements are issued.] [GASBIG 2015-1, Q7.5.13, as amended by GASBS XX, ¶8 and fn2]
.704-10 [Replace paragraph .109h with paragraph .110e; replace or results of operations with or that are expected to produce significant differences from current period results of operations; and replace paragraph .109c with paragraph .110 c( 1).] [GASBIG 2015-1, Q7.5.14, as amended by GASBS XX, ¶8]
.704-11 [Replace paragraph .109a with paragraph .110a; replace a brief discussion of with an overview of.] [GASBIG 2015-1, Q7.84.1, as amended by GASBS 84, ¶5 and GASBS XX, ¶8]
.706-6 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.7.5, as amended by GASBS XX, ¶11]
.708-2 [Replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q7.22.2, as amended by GASBS XX, ¶28]
.708-10 [Replace balance sheet date with short-term financial resources balance sheet date.] [GASBIG 2015-1, Q7.23.2, as amended by GASBS XX, ¶11]
.712-1 [Revise the second sentence of the question as follows:] (See paragraphs .142 and .197 of this section, for example.) [GASBIG 2015-1, Q7.24.6, as amended by GASBS XX, ¶29 and ¶30]
.714-1 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.26.1, as amended by GASBS XX, ¶11]
.714-7 [Replace special and extraordinary with unusual or infrequent.] [GASBIG 2015-1, Q7.45.1, as amended by GASBS XX, ¶9 and ¶29]
.715-1 [Replace city-wide vehicle maintenance expenditures with outflows of short-term financial resources for city-wide vehicle maintenance.] [GASBIG 2015-1, Q7.28.1, as amended by GASBS XX, ¶23]
.715-5 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.28.5, as amended by GASBS XX, ¶23]
.715-16 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.4, as amended by GASBS XX, ¶23]
.715-17 [In the question, replace federal reimbursement with federal payment, replace expenditures with costs, and delete ,or revenue and expense; in the answer, replace revenue or expense from the grant with inflows of short-term financial resources/revenue or outflows of short-term financial resources/expenses from the grant; and in the last sentence, replace revenue with inflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.5, as amended by GASBS XX, ¶22 and ¶23]
.716-16 [Insert meeting the definition of a subsidy after the first use of grant; replace as non-operating revenue with in the noncapital subsidy classification; replace as a capital contribution with in the other nonoperating revenue classification; and replace paragraph .192 with paragraph .194.] [GASBIG 2015-1, Q7.72.8, as amended by GASBS XX, ¶30]
.717-3 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.33.4, as amended by GASBS XX, ¶23]
.717-13 [Replace capital expenditures with capital outlays.] [GASBIG 2015-1, Q7.39.4, as amended by GASBS XX, ¶27]
[In heading .719, replace special and extraordinary items, and transfers with transfers, and unusual or infrequent items.]
.719-1 [Replace revenue with an inflow of short-term financial resources.] [GASBIG 20151, Q7.42.1, as amended by GASBS XX, ¶22]
[Replace heading .721 with the following:] Unusual or Infrequent Items
[Delete Questions .721-1 and .721-2.]
.725-7 [Replace revenues with inflows of short-term financial resources or revenues; replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.11, as amended by GASBS XX, ¶22 and ¶23]
.725-16 [Revise the answer as follows:] The amount would be reported in the same fashion as other sales to outsiders—that is, as a direct expense or as a general revenue—or if “unusual or infrequent,” as an unusual or infrequent item. [GASBIG 2015-1, Q7.47.22, as amended by GASBS XX, ¶9 and ¶10]
.729-2 [In the second bullet in the answer, delete the parentheses and delete or notes; in the first bullet in the answer, replace the second sentence with the following:] Governments meet the major component unit reporting requirements of Section 2600 by using multiple columns and rows in the government-wide financial statements or by including combining statements in the basic financial statements. [GASBIG 2015-1, Q7.4.4, as amended by GASBS XX, ¶33]
.729-6 [Replace expenditure levels with levels of outflows of short-term financial resources.] [GASBIG 2015-1, Q7.55.3, as amended by GASBS XX, ¶23]
.729-11 [Replace special revenue with special resources.] [GASBIG 2015-1, Q7.56.1, as amended by GASBS XX, ¶28]
.729-13 [Replace revenues or expenses/expenditures with revenues/inflows of short-term financial resources, or expenses/outflows of short-term financial resources.] [GASBIG 2015-1, Q7.56.3, as amended by GASBS XX, ¶22 and ¶23]
[Revise Question .729-15 as follows:]
.729-15
Q—For determining major governmental funds, are inflows of resources and outflows of resources from noncurrent activities included in the calculations?
A—Yes. The major fund criteria are set forth in paragraph .160 of this section. Inflows of short-term financial resources include inflows of resources from noncurrent activities, and outflows of short-term financial resources include outflows of resources from noncurrent activities.
[GASBIG 2015-1, Q7.56.5, as amended by GASBS XX, ¶22, ¶23, and ¶27]
[Revise Question .729-16 as follows:]
.729-16 
Q—Can the measurement focus and basis of accounting used for a government’s budget be used to determine major funds?
A—No. The measurement focus and basis of accounting used for a government’s budget might be useful in making an initial assessment, but ultimately, the major fund calculations should be done using GAAP bases of accounting. Governmental funds should be evaluated based on measurements applying the short-term financial resources measurement focus and accrual basis of accounting; enterprise funds should be tested using measurements applying the economic resources measurement focus and accrual basis of accounting.
[GASBIG 2015-1, Q7.56.6, as amended by GASBS XX, ¶12 and fn10]
.729-17 [Replace revenues, and expenditures with inflows of short-term financial resources, and outflows of short-term financial resources.] [GASBIG 2015-1, Q7.56.7, as amended by GASBS XX, ¶22 and ¶23]
.729-18 [In the question and in the table in the answer, replace special revenue with special resources.] [GASBIG 2015-1, Q7.56.8, as amended by GASBS XX, ¶28]
.729-19 [Replace revenue and revenues with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q7.56.9, as amended by GASBS XX, ¶22]
[Revise Question .729-20 as follows:]
.729-20
Q—For determining major enterprise funds, should the analysis of revenues and expenses include nonoperating revenues and expenses and unusual or infrequent items?
A—Nonoperating revenues and expenses,although required to be reported separately from operating revenues and expenses, are indicators of the significance of the activities accounted for in individual funds and should be included in determining major enterprise funds. However, footnote 31 of this section specifically excludes unusual or infrequent items from the major fund determination.
[GASBIG 2015-1, Q7.56.10, as amended by GASBS XX, ¶9, ¶29, and ¶30]
.729-23 [Replace revenues, or expenditures/expenses with inflows of short-term financial resources/revenues, or outflows of short-term financial resources/expenses.] [GASBIG 2015-1, Q7.56.13, as amended by GASBS XX, ¶22 and ¶23]
.729-24 [Replace transaction with event; replace revenues, and expenditures/expenses with inflows of short-term financial resources/revenues, and outflows of short-term financial resources/expenses; and in the first sentence of the second paragraph of the answer, delete not and because they are reported as other financing sources (uses).] [GASBIG 2015-1, Q7.56.14, as amended by GASBS XX, ¶22, ¶23, and ¶30]
.730-1 [Replace financing sources and uses with certain inflows of short-term financial resources and outflows of short-term financial resources.] [GASBIG 2015-1, Q7.4.2, as amended by GASBS XX, ¶22 and ¶23]
.730-2 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting; replace cash, modified accrual, or budgetary basis of accounting with cash, budgetary, or other basis of accounting; and replace the accrual basis with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.57.1, as amended by GASBS XX, fn10]
[Revise heading .732 and Question .732-1 as follows:]
.732 Short-Term Financial Resources Balance Sheet
.732-1
Q—For governmental funds, should long-term receivables be recognized on the short-term financial resources balance sheet?
A—Generally, no. Long-term receivables are items that arise from a long-term transaction and are recognized when payments become due. Payments due in future periods would not be recognized until those future periods. If a payment became due in the current period and was unpaid at period-end, it should be reported as an asset, subject to considerations regarding collectability.
[GASBIG 2015-1, Q7.62.1, as amended by GASBS XX, ¶12 and ¶19]
[Revise Question .733-1 as follows:]
.733-1 [Replace those that are not in spendable form with interfund loans receivable replace “resources not in spendable form” with “interfund loans receivable”; and replace Inventories and prepaid amounts with Long-term portion of interfund loans.] [GASBIG 2015-1, QZ.54.6, as amended by GASBS XX, ¶12 and ¶26]
.733-4 [Replace expenditures with outflows of resources.] [GASBIG 2017-1, Q4.38, as amended by GASBS XX, ¶27]
[Revise heading .735 and Question .735-1 as follows:]
.735 Statement of Short-Term Financial Resource Flows
.735-1
Q—In the statement of short-term financial resource flows, can a government report inflows of resources from noncurrent activities with outflows of resources from current activities and outflows of resources from noncurrent activities with outflows of resources from current activities?
A—No. The presentation of the statement of short-term financial resource flows is limited to one format; therefore, net flows from noncurrent activities should be reported after net flows from current activities, as presented in paragraph .166 of this section.
[GASBIG 2015-1, Q7.64.1, as amended by GASBS XX, ¶11 and ¶27]
[Revise headings .736–.738 and Question .737-1 as follows:]
.736 Classification of inflows of resources and outflows of resources
.737 Noncurrent activities
.737-1
Q—Can debt proceeds—that is, the face amount of the debt net of premiums, discounts, and issuance costs—be reported as inflows of resources from noncurrent activities?
A—No. Paragraph .169 of this section requires the face amount of long-term debt, rather than the proceeds, to be reported as an inflow of resources from noncurrent activities. That paragraph also includes issuance premium or discount among the items that should be reported as inflows or outflows of resources from noncurrent activities. Debt issue costs paid out of debt proceeds, such as underwriter fees, should be reported as outflows of resources from current activities.
[GASBIG 2015-1, Q7.66.1, as amended by GASBS XX, ¶27]
.738 Unusual or infrequent items
.738-1 [Replace special and extraordinary and extraordinary and special with unusual or infrequent.] [GASBIG 2015-1, Q7.67.1, as amended by GASBS XX, ¶9 and ¶10]
.738-2 [In the question, replace a special and extraordinary with an unusual or infrequent revise the answer as follows:] Yes. For example, assume that a government sold a significant governmental capital asset for a large amount, but at a negligible gain or loss. Significant proceeds from the sale would be reported in the governmental fund financial statements; however, because the gain or loss is insignificant, it would not be reported as an unusual or infrequent item in the statement of activities. On the other hand, the reverse situation—a transaction is an unusual or infrequent item in the statement of activities but not in the fund financial statements—also could occur. For example, a local government assumes the debt of another organization, either because it is required to as a guarantor, or because it chooses to under a “moral” obligation. Because this debt arises from a long-term transaction, the debt would be recognized as payments become due. There is no unusual or infrequent item required to be reported in the statement of short-term financial resource flows. In the statement of activities, however, the event results in a change in net position and would be reported. [GASBIG 2015-1, Q7.67.2, as amended by GASBS XX, ¶9, ¶11, and ¶23]
[Delete Question .738-3.]
.739-1 [In the first sentence of the answer, replace last section with other nonoperating revenue and expenses section; revise the third sentence of the answer as follows:] In either case, governmental funds would not report the event because capital assets are not recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting. [GASBIG 2015-1, Q7.74.4, as amended by GASBS XX, ¶12 and ¶30]
.751-1 [Replace .191–.195 with .193–.197; update other cross-references for renumbering.] [GASBIG 2015-1, Q7.29.5, as amended by GASBS XX, ¶10 and ¶29–¶32]
.751-3 [Revise the sources as follows:] GASBIG 2015-1, Q7.72.4, as amended by GASBS XX, ¶30
.751-4 [Insert meeting the definition of a subsidy after the first use of grant; replace as nonoperating revenue with in the noncapital subsidy classification; replace as a capital contribution with in the other nonoperating revenue classification; and replace paragraph .192 with paragraph .194.] [GASBIG 2015-1, Q7.72.8, as amended by GASBS XX, ¶30]
.751-5 [Replace should not report the transaction as an operating expense with should report the transaction as an other nonoperating expense.] [GASBIG 2015-1, Q7.72.9, as amended by GASBS XX, ¶30]
[Revise heading .752 and Question .752-1 as follows:]
.752 Definition of operating revenues and expenses and description of nonoperating revenues and expenses
[Delete Question .752-1; renumber subsequent questions.]
.752-1 [In the question, replace operating with operating revenues, noncapital subsidies, revise the answer as follows:] Appropriations meet the definition of a subsidy. Appropriations for noncapital-related purposes should be reported as noncapital subsidies. Appropriations for capital-related purposes should be reported as other nonoperating revenues and expenses. [GASBIG 2015-1, Q7.73.2, as amended by GASBS XX, ¶30–¶32]
.752-2 [Replace Footnote 45 of this section provides that with Consistent with paragraph .195 of this section,.] [GASBIG 2015-1, Q7.73.3, as amended by GASBS XX, ¶31]
[Delete renumbered Question .752-3; renumber subsequent question.]
[Insert new heading .753 and text as follows; renumber subsequent headings and questions.]
.753 Definition of subsidies
No questions assigned.
.754-3 [Replace a separate item after with other.] [GASBIG 2015-1, Q7.74.3, as amended by GASBS XX, ¶30 and ¶31]
.754-4 [In the first sentence of the answer, replace last section with other nonoperating revenues and expenses section; revise the third sentence of the answer as follows:] In either case, governmental funds would not report the event because capital assets are not recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting. [GASBIG 2015-1, Q7.74.4, as amended by GASBS XX, ¶12 and ¶30]
.764-1 [Replace as RSI or in the basic financial statements with in RSI ; replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q4.36.1, as amended by GASBS XX, ¶28 and ¶34]
.764-3 [Replace special revenue funds with special resources funds; replace disclosure with presentation.] [GASBIG 2015-1, Q7.91.1, as amended by GASBS XX, ¶28 and ¶34]
.764-4 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.91.2, as amended by GASBS XX, ¶28]
.764-5 [Replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q7.91.3, as amended by GASBS XX, ¶28 and ¶34]
.764-6 [Replace special revenue with special resources; delete the last sentence of the answer.] [GASBIG 2015-1, Q7.91.4, as amended by GASBS XX, ¶28 and ¶34]
.764-7 [Delete the first sentence of the question; replace special revenue with special resources; and replace that schedule with the budgetary comparison schedule.] [GASBIG
2015-1, Q7.91.5, as amended by GASBS XX, ¶28 and ¶34]
.764-8 [Delete the first sentence of the question; replace special revenue with special resources; and replace that schedule with the budgetary comparison schedule.] [GASBIG 2015-1, Q7.91.6, as amended by GASBS XX, ¶28 and ¶34]
[Delete Questions .764-9 and .764-10; renumber subsequent questions.]
.764-9 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.91.9, as amended by GASBS XX, ¶11 and ¶27]
.764-10 [Revise the sources as follows:] GASBIG 2015-1, Q7.91.10, as amended by GASBS XX, ¶34
[Revise Question .764-11 as follows:]
.764-11
Q—Budgeted inflows of resources forecasts are provided by a state’s legislative budget office for use in determining budgetary outflows of resources levels for all legislatively appropriated funds. Those estimated budgetary inflows of resources, however, are not contained in the appropriations bill and thus are not “legally adopted.” Should the state report those budgetary inflows of resources estimates as budgeted inflows of resources in the budget-to-actual comparison?
A—Yes. The estimated budgetary inflows of resources should be included in the budgetary comparison as budgeted inflows of resources. Paragraph .209 of this section requires that actual results be compared with amounts in the “appropriated budget.” Paragraph .108 of Section 2400, which is referenced in footnote 53 of this section, states that the appropriated budget is defined as “the budgetary outflows of resources authority created by the appropriation bills or ordinances which are signed into law and related estimated budgetary inflows of resources.” The reference to estimated budgetary inflows of resources after the mention of the legal adoption of the appropriations bill implies that the budgetary inflows of resources estimates need not be “legally adopted.”
[GASBIG 2015-1, Q7.91.11, as amended by GASBS XX, ¶27 and ¶34]
[Delete Question .764-14.]
.764-12 [Replace special revenue with special resources; delete in the basic statements or as RSI.] [GASBIG 2015-1, Q7.91.13, as amended by GASBS XX, ¶28 and ¶34]
.764-13 [Revise the sources as follows:] GASBIG 2015-1, Q7.91.14, as amended by GASBS XX, ¶34
[Revise Question .764-17 as follows:]
.764-17
Q—Paragraph .210 of this section requires disclosure in notes to RSI of excesses of budgetary outflows of resources over appropriations in the general fund and each major special resources fund that has a legally adopted annual budget. Is disclosure in notes to RSI required for similar excesses in other governmental funds?
A—No. However, paragraph .106h of Section 2300 requires disclosure of significant violations of finance-related legal and contractual provisions in notes to the basic financial statements. Therefore, disclosure in notes to the basic financial statements of the excess of budgetary outflows of resources over appropriations is required for any fund, including nonmajor special resources funds, capital projects funds, or debt service funds, if the overage constitutes a significant violation of finance-related legal and contractual provisions. In addition, paragraph .106h requires governments to disclose in notes to financial statements actions taken to address such violations.
[GASBIG 2015-1, Q7.93.1, as amended by GASBS XX, ¶27, ¶28, and ¶34]
[Revise Question .764-18 as follows:]
.764-18
Q—Should material violations of budgetary spending limitations (excess of budgetary outflows of resources over appropriations) be disclosed in notes to RSI?
A—Paragraph .210 of this section states that notes to RSI should disclose excesses of budgetary outflows of resources over appropriations in individual funds presented in the budgetary comparison. In addition, if the excess is considered to be a significant violation of finance-related legal provisions, a disclosure in the notes to the basic financial statements is required. (See also Question .764-17 in this section.)
[GASBIG 2015-1, Q7.93.2, as amended by GASBS XX, ¶27 and ¶34]
.764-19 [Replace special revenue with special resources; replace revenues and expenditures with budgetary inflows of resources and budgetary outflows of resources.] [GASBIG 2015-1, QZ.54.41, as amended by GASBS XX, ¶27 and ¶28]
.801 [Replace Nonoperating revenues generally should with Noncapital subsidies.] [AICPA SLG 2002, ¶6.73 and ¶12.70, as amended by GASBS XX, ¶31 and ¶32]
* * *
ADDITIONAL FINANCIAL REPORTING CONSIDERATIONS SECTION 2250
.107 [Delete /expenditure.] [GASBS 62, ¶55, as amended by GASBS 63, ¶8 and GASBS XX, ¶27]
[In footnote 5, replace balance sheet with short-term financial resources balance sheet.]
[GASBS 62, fn28, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]
[In footnote 6, replace balance sheet with short-term financial resources balance sheet.] [GASBS 56, fn3, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]
.116 [Replace results with that are expected to produce significant differences from current period results.] [GASBS 56, ¶15, as amended by GASBS XX, ¶8]
.118 [Replace expenditures with outflows of short-term financial resources; replace revenues with revenues/inflows of short-term financial resources in subparagraph a.] [GASBS 56, ¶17, as amended by GASBS XX, ¶22 and ¶23]
.120 [Replace results with that are expected to produce significant differences from current period results.] [GASBS 56, ¶19, as amended by GASBS XX, ¶8]
.724-2 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q4.38.4, as amended by GASBS XX, ¶28]
* * *
NOTES TO FINANCIAL STATEMENTS SECTION 2300
Sources: [Add GASBS XX.]
.106 [Delete footnote 2 and subparagraphs a(5) and a(10); renumber subsequent footnotes and subparagraphs. In the sources, delete GASBS 38, ¶7 and replace GASBS 54, ¶23 and ¶24 with GASBS 54, ¶23, as amended by GASBS XX, ¶23; GASBS 54, ¶24.]
.107 [Delete renumbered footnote 3 and subparagraph (d); in subparagraph (b) replace paragraphs .104 and .108 with paragraph .107; in subparagraph (pp) replace special revenue funds with special resources funds; and revise subparagraph (cc) as follows:] The program or function or identifiable activity to which an unusual or infrequent item is related, if applicable, and whether that item was within the control of management. (See Section 2200, paragraphs .145 and .170.) [NCGAI 6, ¶5, as amended; GASBS 34, ¶46, ¶77, and fn41; GASBS 34, ¶89, as amended by GASBS XX, ¶10; GASBS 38, ¶13, as amended by GASBS 63, ¶8; GASBS 42, ¶17, as amended by GASBS 62, ¶45−¶49 and GASBS 63, ¶8; GASBS 46, ¶6, as amended by GASBS 63, ¶8; GASBS 54, ¶23−¶27; GASBS 54, ¶32, as amended by GASBS XX, ¶28; GASBS 56, ¶4−¶7 and ¶16−¶19; GASBS 62, ¶33, ¶44, ¶52, ¶75, ¶85, ¶87, ¶89, ¶116, ¶170, ¶171, ¶187, ¶210, ¶280, ¶330, ¶384, ¶429, ¶473, ¶474, ¶493, ¶494, and ¶500; GASBS 62, ¶50, as amended by GASBS XX, ¶9; GASBS 62, ¶62, as amended by GASBS 63, ¶8; GASBS 63, ¶13 and ¶14; GASBS 69, ¶55−¶57; GASBS 69, ¶58, as amended by GASBS XX, ¶22 and ¶23; GASBS 70, ¶14−¶17; GASBS 72, ¶80−¶82; GASBS 74, ¶34 and ¶35; GASBS 77, ¶5, ¶6, ¶9, and ¶10; GASBS 77, ¶7 and ¶8, as amended by GASBS XX, ¶12; GASBS 94, ¶35, ¶36, and ¶57–¶59; GASBS 96, ¶60 and ¶61; GASBS XX, ¶10]
.123 [In subparagraph (a), replace expenditure with use.] [GASBS 34, ¶121, as amended by GASBS 63, ¶8 and GASBS XX, ¶27]
.125 [Replace balance sheet with short-term financial resources balance sheet.] [GASBS 38, ¶13, as amended by GASBS 63, ¶8, GASBS 68, ¶122, GASBS 75, ¶142, GASBS 78, ¶8, GASBS 85, ¶23, and GASBS XX, ¶11]
.130 [Replace governmental fund balance sheet with short-term financial resources balance sheet.] [GASBS 63, ¶13, as amended by GASBS XX, ¶11]
.703-2 [Replace paragraph .109a with paragraph .110a; replace a brief discussion of with an overview of.] [GASBIG 2015-1, Q7.84.1, as amended by GASBS 84, ¶5 and GASBS XX, ¶8]
[Delete paragraph .802.]
* * *
BUDGETARY REPORTING SECTION 2400
Sources: [Add GASBS XX.]
[Delete the note that follows the See Also references.]
[In the Statement of Principle, Budgetary Reporting, replace special revenue fund with special resources fund; replace encouraged with required; and replace RSI with required supplementary information (RSI).] [GASBS 34, ¶130, as amended by GASBS 41, ¶3 and GASBS XX, ¶28 and ¶34; GASBS XX, ¶34]
.102 [In the first sentence, replace budgetary comparisons with budgetary comparison schedules and insert as RSI after presented; replace special revenue fund with special resources fund; delete the second sentence, including footnote 1, and renumber subsequent footnotes; and replace the last two sentences with the following:] Separate columns for the variances between (a) original and final budget amounts and (b) final budget amounts and actual budget results are required to be presented. An analysis of significant variations between original and final budget amounts and final budget amounts and actual budget results also is required to be presented in notes to RSI. The analysis should include any currently known reasons for those variations that are expected to have a significant effect on budgetary fund balance or to produce significant differences from current period budgetary results. [GASBS 34, ¶130, as amended by GASBS 41, ¶3 and GASBS XX, ¶28 and ¶34; GASBS XX, ¶34]
[In renumbered footnote 1, replace special revenue fund with special resources fund.] [GASBS 41, ¶3, as amended by GASBS XX, ¶28]
[In renumbered footnote 3, replace expenditure with budgetary outflows of resources; replace revenues with budgetary inflows of resources.] [GASBS 34, fn55, as amended by GASBS XX, ¶27]
.103 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows; revise the last sentence as follows, including removal of current footnote 5, and renumber subsequent footnotes:] Notes to RSI should disclose the budgetary basis of accounting and excesses of outflows of budgetary resources over appropriations in individual funds presented in the budgetary comparison. [NCGAI 6, ¶5; GASBS 34, ¶131, as amended by GASBS 37, ¶19 and GASBS XX, ¶11 and ¶27; GASBS 37, ¶19, as amended by GASBS XX, ¶27]
.105 [Replace special revenue funds with special resources funds.] [NCGAS 1, ¶139 and ¶155, as amended by GASBS 14, GASBS 34, ¶130, and GASBS XX, ¶28]
.106 [Replace revenue and expenditure with budgetary inflows of resources and budgetary outflows of resources.] [NCGAS 1, ¶93, as amended by GASBS XX, ¶27]
.108 [At the end of the sentence before the lettered list, add presented in RSI; replace expenditure with budgetary outflows of resources; and replace revenues with budgetary inflows of resources.] [NCGAI 10, ¶11, as amended by GASBS XX, ¶27; GASBS 34, ¶6; GASBS 34, ¶130, as amended by GASBS XX, ¶34]
[Delete original footnote 6.]
.110 [Revise as follows:] Basis differences arise through the use of a basis of accounting for budgetary purposes that differs from the measurement focus and basis of accounting applicable to the fund type when reporting on the operations in accordance with GAAP. [NCGAI 10, ¶16, as amended by GASBS XX, ¶12 and fn10]
.113 [Revise the third sentence as follows:] Additionally, some subsidiary perspective, such as nature of the source of inflows of resources, special projects, or capital and operating budgets, may also be used. [NCGAI 10, ¶19, as amended by GASBS XX, ¶27]
.114 [Replace revenue and expenditure/expense with inflows of resources and outflows of resources.] [NCGAI 10, ¶20, as amended by GASBS XX, ¶27]
.116 [Replace expenditure with budgetary outflows of resources.] [NCGAI 10, ¶22, as amended by GASBS XX, ¶27]
.120 [Replace special revenue fund with special resources fund.] [NCGAI 10, ¶13, as amended by GASBS 34, ¶6, ¶130, and ¶131 and GASBS XX, ¶28]
.121 [Replace revenue with budgetary inflows of resources; replace expenditure with budgetary outflows of resources; replace special revenue with special resources; and delete current footnote 7.] [NCGAI 10, ¶14, as amended by GASBS 34, ¶6, ¶130, and ¶131 and GASBS XX, ¶27 and ¶28]
.702-1 [Replace special revenue funds with special resources funds; replace disclosure with presentation.] [GASBIG 2015-1, Q7.91.1, as amended by GASBS XX, ¶28 and ¶34] .702-2 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.91.2, as amended by GASBS XX, ¶28]
.702-3 [Replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q7.91.3, as amended by GASBS XX, ¶28 and ¶34]
.702-4 [Replace special revenue with special resources; delete the last sentence of the answer.] [GASBIG 2015-1, Q7.91.4, as amended by GASBS XX, ¶28 and ¶34]
.702-5 [Delete the first sentence of the question; replace special revenue with special resources; and replace that schedule with the budgetary comparison schedule.] [GASBIG 2015-1, Q7.91.5, as amended by GASBS XX, ¶28 and ¶34]
.702-6 [Delete the first sentence of the question; replace special revenue funds with special resources funds; replace that schedule with the budgetary comparison schedule.] [GASBIG 2015-1, Q7.91.6, as amended by GASBS XX, ¶28 and ¶34]
[Delete Questions .702-7 and .702-8; renumber subsequent questions.]
.702-7 [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.91.9, as amended by GASBS XX, ¶11, and ¶27]
.702-8 [Revise the sources as follows:] GASBIG 2015-1, Q7.91.10, as amended by GASBS XX, ¶34
[Revise Question .702-9 as follows:]
.702-9
Q—Budgeted inflows of resources forecasts are provided by a state’s legislative budget office for use in determining budgetary outflows of resources levels for all legislatively appropriated funds. Those estimated budgetary inflows of resources, however, are not contained in the appropriations bill and thus are not “legally adopted.” Should the state report those budgetary inflows of resources estimates as budgeted inflows of resources in the budget-to-actual comparison?
A—Yes. The estimated budgetary inflows of resources should be included in the budgetary comparison as budgeted inflows of resources. Paragraph .102 of this section requires that actual results be compared with amounts in the “appropriated budget.” Paragraph .108 of this section, which is referenced in footnote 4 of this section, states that the appropriated budget is defined as “the budgetary outflows of resources authority created by the appropriation bills or ordinances which are signed into law and related estimated budgetary inflows of resources.” The reference to estimated budgetary inflows of resources after the mention of the legal adoption of the appropriations bill implies that the budgetary inflows of resources estimates need not be “legally adopted.”
[GASBIG 2015-1, Q7.91.11, as amended by GASBS XX, ¶27 and ¶34]
[Delete current Question .702-12; renumber subsequent questions.]
.702-10 [Replace special revenue with special resources; delete in the basic statements or as RSI.] [GASBIG 2015-1, Q7.91.13, as amended by GASBS XX, ¶28 and ¶34]
.702-11 [Revise the sources as follows:] GASBIG 2015-1, Q7.91.14, as amended by GASBS XX, ¶34
[Revise Question .702-15 as follows:]
.702-15
Q—Paragraph .103 of this section requires disclosure in notes to RSI of excesses of budgetary outflows of resources over appropriations in the general fund and each major special resources fund that has a legally adopted annual budget. Is disclosure in notes to RSI required for similar excesses in other governmental funds?
A—No. However, paragraph .106h of Section 2300 requires disclosure of significant violations of finance-related legal and contractual provisions in notes to the basic financial statements. Therefore, disclosure in notes to the basic financial statements of the excess of budgetary outflows of resources over appropriations is required for any fund, including nonmajor special resources funds, capital projects funds, or debt service funds, if the overage constitutes a significant violation of finance-related legal and contractual provisions. In addition, paragraph .106h requires governments to disclose in notes to financial statements actions taken to address such violations.
[GASBIG 2015-1, Q7.93.1, as amended by GASBS XX, ¶27, ¶28, and ¶34]
[Revise Question .702-16 as follows:]
.702-16
Q—Should material violations of budgetary spending limitations (excess of budgetary outflows of resources over appropriations) be disclosed in notes to RSI?
A—Paragraph .103 of this section states that notes to RSI should disclose excesses of budgetary outflows of resources over appropriations in individual funds presented in the budgetary comparison. In addition, if the excess is considered to be a significant violation of finance-related legal provisions, a disclosure in the notes to the basic financial statements is required. (See also Question .702-15 in this section.)
[GASBIG 2015-1, Q7.93.2, as amended by GASBS XX, ¶27 and ¶34]
[Delete Question .709-1.]
.711-1 [Replace as RSI or in the basic financial statements with in RSI and replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q4.36.1, as amended by GASBS XX, ¶28 and ¶34]
.711-2 [Replace special revenue funds with special resources funds; replace disclosure with presentation.] [GASBIG 2015-1, Q7.91.1, as amended by GASBS XX, ¶28 and ¶34] [Delete paragraph .801.]
* * *
CASH FLOWS STATEMENTS SECTION 2450
Sources: [Add GASBS XX.]
[In footnote 5, revise the second sentence as follows:] Paragraphs .195 and .196 of Section 2200 define operating revenues and expenses. [GASBS 34, ¶100, as amended by GASBS 63, ¶8 and GASBS XX, ¶31 and ¶32; GASBS XX, ¶31 and ¶32]
.707-3 [Revise the question and the first two sentences of the answer as follows:]
Q—How should rent income be presented in the statement of cash flows?
A—The basic question is whether rent income meets the classification criteria of the noncapital financing category, the capital and related financing category, or the investing activities category.
[GASBIG 2016-1, Q4.9, as amended by GASBS XX, ¶31]
.707-6 [Revise the answer as follows:] Miscellaneous cash flows should be included in the operating activities category unless the cash flows specifically meet the definition of the noncapital financing, capital and related financing, or investing activities category. [GASBIG 2015-1, Q2.20.5, as amended by GASBS XX, ¶31]
.708-2 [Revise the answer as follows:] Yes. The operating activities category of the statement of cash flows includes the cash receipts and payments associated with the transactions and other events presented as operating revenues and expenses in the statement of revenues, expenses, and changes in fund net position. [GASBIG 2015-1, Q2.18.2, as amended by GASBS XX, ¶31]
[Delete Question .711-6; renumber subsequent questions.]
.711-7 [Replace As discussed in Question .711-6 in this section, regardless with Regardless.] [GASBIG 2015-1, Q2.21.4, as amended by GASBS XX, ¶31]
* * *
SEGMENT INFORMATION SECTION 2500
Sources: [Add GASBS XX.]
.101 [Replace subparagraph (b) with the following:]
b. Condensed statement of revenues, expenses, and changes in net position:
(1) Operating revenues (by major source)
(2) Operating expenses—identifying depreciation (including any amortization) separately
(3) Operating income (loss)
(4) Noncapital subsidies (detailed)
(5) Operating income (loss) and noncapital subsidies
(6) Other nonoperating revenues (expenses)—with separate reporting of major revenues and expenses
(7) Unusual or infrequent items (detailed)
(8) Increase (decrease) in net position
(9) Net position—beginning of period
(10) Net position—end of period.
[GASBS 34, ¶122, as amended by GASBS 37, ¶17, GASBS 63, ¶7 and ¶8, and GASBS XX, ¶30]
.102 [Replace paragraphs .126–.156 with paragraphs .127–.157.] [GASBS 34, ¶123, as amended by GASBS 84, ¶14 and GASBS XX, ¶9 and ¶10; GASBS XX, ¶9 and ¶10]
* * *
REPORTING ENTITY AND COMPONENT UNIT PRESENTATION AND DISCLOSURE SECTION 2600
Sources: [Add GASBS XX.]
.107 [Replace reported using and prepared using with presented applying.] [GASBS 14,
¶44, as amended by GASBS 35, ¶5; GASBS 34, ¶6, ¶12, and ¶16, as amended by GASBS
XX, fn10; GASBS 34, ¶14; GASBS 34, ¶106 and ¶125, as amended by GASBS 63, ¶8 and GASBS 84, ¶5; GASBS 34, ¶107, as amended by GASBS XX, fn10; GASBS 34, ¶126, as amended by GASBS 63, ¶8]
.108 [Replace the third sentence with the following:] In basic financial statements, governments should present each major component unit in a separate column in the reporting entity’s statements of net position and activities, if it does not reduce the readability of the statements. If presenting each major component unit in a separate column in the reporting entity’s statements of net position and activities reduces the readability of the statements, combining statements of major component units should be included in the reporting entity’s basic financial statements after the fund financial statements. [GASBS 14, ¶51, as amended by GASBS 34, fn50, GASBS 61, ¶7, GASBS 63, ¶8, and GASBS XX, ¶33; GASBS 34, ¶126, as amended by GASBS 63, ¶8 and GASBS XX, ¶33; GASBS 34, fn49, as amended by GASBS 84, ¶5; GASBS 34, fn50; GASBS XX, ¶33]
[Delete paragraph .109, including footnotes 3 and 4; renumber subsequent paragraphs and footnotes.]
.113 [In current paragraph .114, replace special revenue fund with special resources fund.] [GASBS 14, ¶54, as amended by GASBS 34, ¶75, ¶80, and ¶82, GASBS 61, ¶9, and GASBS XX, ¶28; GASBS 34, ¶6]
.114 [In current paragraph .115, replace the notes to the financial statements with notes to financial statements; replace subparagraph (b) with the following:]
b. Condensed statement of revenues, expenses, and changes in net position:
(1) Operating revenues (by major source)
(2) Operating expenses—identifying depreciation (including any amortization) separately
(3) Operating income (loss)
(4) Noncapital subsidies (detailed)
(5) Operating income (loss) and noncapital subsidies
(6) Other nonoperating revenues (expenses)—with separate reporting of major revenues and expenses
(7) Unusual or infrequent items (detailed)
(8) Increase (decrease) in net position
(9) Net position—beginning of period
(10) Net position—end of period.
[GASBS 61, ¶9, as amended by GASBS 63, ¶7 and ¶8, GASBS 84, ¶14, GASBS 85, ¶4, and GASBS XX, ¶30]
.115 [In current paragraph .116, replace current with short-term. Add and accrual basis of accounting after measurement focus.] [GASBS 14, ¶55, as amended by GASBS 61, ¶10, GASBS 72, ¶64, and GASBS 90, ¶5–¶8; GASBS 14, ¶73, as amended by GASBS 61, ¶10; GASBS 31, ¶5, as amended by GASBS 62, ¶202–¶210; GASBS 72, ¶64; GASBS 90, ¶3 and ¶5–¶7; GASBS 90, ¶8, as amended by GASBS XX, ¶12]
.117 [Revise the sources as follows:] GASBS 48, ¶15, as amended by GASBS 65, ¶13,
GASBS 92, ¶6, and GASBS XX, ¶22 and ¶23; GASBS 65, ¶13, as amended by GASBS XX, ¶22; GASBS 92, ¶6
.704-4 [Revise the answer as follows:] A government that presents its component units in more than one column may segregate the component units using any method that it chooses. The provisions in paragraphs .107, .108, and .110 of this section regarding the mechanics of discrete presentation, are intended to provide guidance regarding the presentation of major components units. Paragraph .108 requires governments to present major component units in separate columns in the government-wide statements if it does not reduce the readability of the statements. In addition, component units could be presented based on functional groupings, whether component units are governmental or business type, or whether the primary government is financially accountable based on fiscal dependency and a financial benefit or burden relationship. However, segregating component units into functional groupings in the government-wide statements does not relieve the government of the major component unit reporting responsibility in combining statements. [GASBIG 2015-1, Q4.28.4, as amended by GASBS XX, ¶33]
.704-6 [Revise the answer as follows:] Paragraph .105 of this section requires component unit information to be displayed in the reporting entity’s government-wide statements. Paragraph .108 of this section requires major component unit information to be presented in a separate column in the reporting entity’s statements of net position and activities if it does not reduce the readability of the statements. Presentation in combining statements is not applicable because the major component unit reporting requirements are met by discrete presentation in the government-wide statements. [GASBIG 2015-1, Q4.28.9, as amended by GASBS XX, ¶33]
.704-13 [Revise the sources as follows:] GASBIG 2015-1, Q4.33.3, as amended by GASBS XX, ¶9, ¶10, and ¶29–¶32
.704-15 [Replace as RSI or in the basic financial statements with in RSI; replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q4.36.1, as amended by GASBS XX, ¶28 and ¶34]
.705-2 [Revise the answer as follows:] A government that presents its component units in more than one column may segregate the component units using any method that it chooses. The provisions in paragraphs .107, .108, and .110 of this section regarding the mechanics of discrete presentation, are intended to provide guidance regarding the presentation of major components units. Paragraph .108 requires governments to present major component units in separate columns in the government-wide statements if it does not reduce the readability of the statements. In addition, component units could be presented based on functional groupings, whether component units are governmental or business type, or whether the primary government is financially accountable based on fiscal dependency and a financial benefit or burden relationship. However, segregating component units into functional groupings in the government-wide statements does not relieve the government of the major component unit reporting responsibility in combining statements. [GASBIG 2015-1, Q4.28.4, as amended by GASBS XX, ¶33]
[Delete Question .705-3; renumber subsequent questions.]
.705-4 [Add the following at the end of the first sentence in the question:] because it is not feasible to present each major component unit in a separate column in the reporting entity’s statements of net position and activities [GASBIG 2015-1, Q4.28.20, as amended by GASBS XX, ¶33]
[Delete current Questions .705-6–.705-9.]
.705-5 [In the second bullet in the answer, delete the parentheses and delete or notes; in the first bullet in the answer, replace the second sentence with the following:] Governments meet the major component unit reporting requirements of this section by using multiple columns and rows in the government-wide financial statements or by including combining statements in the basic statements. [GASBIG 2015-1, Q7.4.4, as amended by GASBS XX, ¶33]
.706-3 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q4.30.3, as amended by GASBS 84, ¶26 and GASBS XX, ¶28]
.706-5 [Replace external debt with external debt—a long-term transaction.] [GASBIG 2015-1, Q4.30.5, as amended by GASBS XX, ¶13 and GASBIG 2016-1, Q5.4]
.706-6 [Replace special revenue with special resources.] [GASBIG 2015-1, Q4.30.6, as amended by GASBS XX, ¶28]
.706-19 [Replace special revenue with special resources.] [GASBIG 2015-1, Q7.56.1, as amended by GASBS XX, ¶28]
.706-20 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.50, as amended by GASBS XX, ¶28 and GASBIG 2016-1, Q5.41]
.713-1 [Replace external debt with external debt—a long-term transaction.] [GASBIG 2015-1, Q4.30.5, as amended by GASBS XX, ¶13 and GASBIG 2016-1, Q5.4]
* * *
SUPPLEMENTAL AND SPECIAL-PURPOSE REPORTING SECTION 2700
.103 [Replace revenues and other financing sources with inflows of short-term financial resources; replace expenditures with outflows of short-term financial resources.] [NCGAS 1, ¶174, as amended by GASBS 34, ¶6 and GASBS XX, ¶27]
* * *
STATISTICAL SECTION SECTION 2800
Sources: [Add GASBS XX.]
.103 [Replace paragraph .108 of Section 2200 with paragraph .109 of Section 2200.] [GASBS 44, ¶4, as amended by GASBS XX, ¶7]
.109 [Revise subparagraph (a) as follows:] Governments engaged only in business-type activities or only in business-type and fiduciary activities should present revenues by major source for their business-type activities, distinguishing between operating, noncapital subsidy, and other nonoperating revenues and expenses, in the statistical section of their separately issued financial reports. [GASBS 44, ¶10, as amended by GASBS 63, ¶8, GASBS 73, ¶115 and ¶116, GASBS 74, ¶3, ¶58, and ¶59, GASBS 84, ¶14, and GASBS
XX, ¶35; GASBS XX, ¶35]
.110 [Revise the sources as follows:] GASBS 44, ¶11, as amended by GASBS 63, ¶8; GASBS XX, ¶10 and ¶35
.111 [Revise subparagraph (b) as follows:] Governments should present for total governmental funds: inflows of resources from current activities by source, outflows of resources from current activities by function, net flows from noncurrent activities and other changes in fund balances by type, and total change in fund balances. For purposes of this schedule, the interest and principal components of outflows of resources for debt service should be shown separately. A ratio of total debt service outflows of resources (interest and principal combined) to noncapital outflows of resources should also be presented. [GASBS 44, ¶12, as amended by GASBS 54, ¶5, GASBS 63, ¶8, and GASBS XX, ¶27]
[Delete Question .707-5; renumber subsequent questions.]
.708-2 [Replace governmental funds balance sheet with short-term financial resources balance sheet.] [GASBIG 2015-1, Q9.10.1, as amended by GASBS XX, ¶11]
.708-4 [Replace revenue and expenditure with inflows of resources and outflows of resources; replace prepared on a current financial resources with presented applying the short-term financial resources; and delete modified.] [GASBIG 2015-1, Q9.11.1, as amended by GASBS XX, ¶12 and ¶27]
.708-5 [Replace tax revenues with inflows of tax resources; replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q9.11.2, as amended by GASBS XX, ¶11 and ¶27]
.708-6 [Replace noncapital expenditures with noncapital outflows of resources.] [GASBIG 2015-1, Q9.11.3, as amended by GASBS XX, ¶27]
.708-7 [Replace expenditures with outflows of resources.] [GASBIG 2015-1, Q9.11.4, as amended by GASBS XX, ¶27]
[Revise Question .708-8 as follows:]
.708-8
Q—How can a government obtain the noncapital outflows of resources required to calculate the debt service ratio?
A—Noncapital outflows of resources equal total governmental fund outflows of resources from both current and noncurrent activities, less:
  1. The amount reported separately in the changes in fund balances schedule as capital outlay or capital outflows of resources (to the extent capitalized for the government-wide statement of net position), and
  2. Any outflows of resources for capitalized assets contained within the functional outflows of resources categories.
The sum of these two amounts should be reported by the government as a reconciling item in its reconciliation of the statement of short-term financial resource flows of the governmental funds to the statement of activities.
[GASBIG 2015-1, Q9.11.5, as amended by GASBS XX, ¶11 and ¶27]
.713-3 [In the question, replace property tax revenue with property tax revenues or inflows of short-term financial resources; in the first sentence of the answer, replace revenue with revenues/inflows of short-term financial resources; and revise the second sentence as follows:] In both financial statements presented applying the economic resources measurement focus and accrual basis of accounting and financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, in any given year revenues/inflows of short-term financial resources may include amounts levied but not yet collected. This information is intended to help a user understand a government’s ability to collect the amounts it levies within a particular period, rather than provide a detailed breakdown of the revenues/inflows of short-term financial resources recognized in a given year. [GASBIG 2015-1, Q9.23.4, as amended by GASBS XX, ¶12, ¶22, and fn10]
.727-4 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q9.41.3, as amended by GASBS XX, ¶23]
.730-4 [Replace presented on an accrual basis with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q3.37.2, as amended by GASBS XX, fn10]
* * *
INTERIM FINANCIAL REPORTING SECTION 2900
.102 [Replace current with short-term.] [NCGAS 1, ¶133, as amended by GASBS 34, ¶80 and GASBS XX, ¶27]
.103 [Replace revenue and expenditure with budgetary inflow of resources and budgetary outflow of resources.] [NCGAS 1, ¶93, as amended by GASBS XX, ¶27]
* * *
FAIR VALUE MEASUREMENT SECTION 3100
[In footnote 2, replace governmental fund balance sheets with short-term financial resources balance sheets.] [GASBS 72, fn2, as amended by GASBS XX, ¶11]
.708-1 [Replace expenditure with outflow of short-term financial resources.] [GASBIG 2016-1, Q4.49, as amended by GASBS XX, ¶23]
* * *
CERTAIN ASSET RETIREMENT OBLIGATIONS SECTION A10
[In footnote 2, replace expenditures/expenses with outflows of short-term financial resources/expenses; replace revenues with inflows of short-term financial resources/ revenues.] [GASBS 83, fn2, as amended by GASBS XX, ¶22 and ¶23]
[In the heading before paragraph .121, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following at the end of the heading:] and Accrual Basis of Accounting
.121 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, liabilities and outflows of short-term financial resources should be recognized for goods and services used for asset retirement activities as they occur. The accumulation of resources in a governmental fund for eventual payment of unmatured general long-term indebtedness, including AROs, does not constitute an outflow of short-term financial resources and should not result in the recognition of an additional governmental fund liability or outflow of short-term financial resources. In the statement of short-term financial resource flows, any facilities and equipment acquisitions associated with asset retirement activities should be reported as outflows of short-term financial resources. [GASBS 83, ¶24, as amended by GASBS XX, ¶12, ¶13, ¶20, and ¶23]
[In heading .713, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following at the end of the heading:] and Accrual Basis of Accounting
* * *
BOND, TAX, AND REVENUE ANTICIPATION NOTES SECTION B50
.102 [Add the following to the end of the last sentence:] if the tax or revenue anticipation note is issued for short-term purposes [NCGAI 9, ¶12, as amended by GASBS 62, ¶34−¶43 and GASBS XX, ¶20 and ¶21; GASBS 34, ¶82, as amended by GASBS 63, ¶8 and GASBS XX, ¶20]
* * *
CASH DEPOSITS WITH FINANCIAL INSTITUTIONS SECTION C20
[In footnote 2, replace government-wide and proprietary fund statements of net position with government-wide statement of net position, the short-term financial resources balance sheet, the proprietary fund statement of fund net position.] [GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
.704-2 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q1.4.3, as amended by GASBS 93, ¶11 and GASBS XX, ¶28]
* * *
CLAIMS AND JUDGMENTS SECTION C50
Sources: [Add GASBS XX; delete GASBI 6.]
.109 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBS 10, ¶52, as amended by GASBS 34, ¶6, GASBS 66, ¶3, and GASBS XX, ¶23]
[In the heading before paragraph .110, replace Expenditure/Expense with Outflow of Short-Term Financial Resources/Expense.]
.110 [Replace expenditure/expense with outflow of short-term financial resources/expense and expenditures/expenses with outflows of short-term financial resources/expenses; add the following after conditions are met:] , except for estimated losses from claims arising from long-term transactions reported in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, which would be reported as outflows of short-term financial resources and liabilities when the payments are due. [GASBS 10, ¶53, as amended by GASBS 34, ¶6 and GASBS XX, ¶20 and ¶23; GASBS XX, ¶20]
[Delete footnote 3; renumber subsequent footnotes.]
.113 [Replace expenditure/expense with outflow of short-term financial resources/expense; add the following to the end of the paragraph:] , except for estimated losses from claims arising from long-term transactions reported in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, which would be reported as outflows of short-term financial resources and liabilities when the payments are due. [GASBS 10, ¶56, as amended by GASBS XX, ¶20 and ¶23]
.114 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBS 30, ¶9, as amended by GASBS XX, ¶23]
[In renumbered footnote 5, replace expenditures/expenses with outflows of short-term financial resources/expenses.] [GASBS 30, ¶9, as amended by GASBS XX, ¶23]
.120 [Replace using with prepared applying.] [GASBS 34, ¶16, as amended by GASBS XX, fn10; GASBS 34, ¶31]
.121 [Revise the third and fourth sentences as follows:] Claims that meet the definition of unusual or infrequent items discussed in paragraph .144 of Section 2200, should be presented individually as the last presented flow of resources prior to the net change in resource flows in the statement of activities. In addition, governments should disclose in notes to financial statements the program or function or identifiable activity to which an unusual or infrequent item is related, if applicable, and whether that item was within the control of management. [GASBS 34, ¶41, as amended by GASBS 62, ¶45−¶49 and GASBS XX, ¶9 and ¶10; GASBS XX, ¶10]
.124 [Revise as follows:] Proprietary and fiduciary funds should report an estimated loss from a claim as an expense or deduction and as a liability in the fund financial statements in accordance with paragraphs .110−.114. In governmental funds, outflows of resources and liabilities should be recognized in accordance with paragraphs .110−.114. [GASBS 34, ¶92 and ¶107, as amended by GASBS XX, ¶12]
.126 [Replace expenditures with outflows of short-term financial resources and replace the expenditure/expense with outflow of financial resources/expense.] [GASBS 10, ¶64, as amended by GASBS 66, ¶3 and GASBS XX, ¶23; GASBS 34, ¶112]
.129 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBS 10, ¶67, as amended by GASBS 63, ¶8 and GASBS XX, ¶23; GASBS 34, ¶98, as amended by GASBS 63, ¶8]
.130 [Replace expenditure/expense with outflow of short-term financial resources/ expense.] [GASBS 10, ¶68, as amended by GASBS 34, ¶112, GASBS 63, ¶8, and GASBS XX, ¶23]
.132 [Replace expenditure/expense with outflow of short-term financial resources/expense; add the following to the end of the second sentence:] , except for assessments arising from long-term transactions reported in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, which would be reported as outflows of short-term financial resources and liabilities when the payments are due [GASBS 10, ¶69, as amended by GASBS 34, ¶6 and GASBS XX, ¶12 and ¶23]
.133 [Replace expenditure/expense with outflow of short-term financial resources/ expense.] [GASBS 10, ¶70, as amended by GASBS XX, ¶23]
.134 [Delete the last sentence.] [GASBI 4, ¶4, as amended by GASBS XX, ¶19]
.138 [Revise as follows; delete footnote 13 and renumber subsequent footnotes.] In governmental funds, the entire amount of the capitalization contribution should be recognized as an outflow of short-term financial resources in the period of the contribution. [GASBI 4, ¶7, as amended by GASBS XX, ¶12 and ¶23]
.139 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBS 10, ¶71, as amended by GASBS XX, ¶23; GASBI 4, ¶9]
.140 [Replace expenditure/expense with outflow of short-term financial resources/ expense.] [GASBS 10, ¶72, as amended by GASBS XX, ¶23]
.141 [Replace expenditure/expense with an outflow of short-term financial resources/ expense .] [GASBS 10, ¶73, as amended by GASBS XX, ¶23]
.142 [Replace expenditure/expense with an outflow of short-term financial resources/ expense .] [GASBS 10, ¶74, as amended by GASBS XX, ¶23]
.143 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBS 10, ¶75, as amended by GASBS XX, ¶23]
.144 [Replace an accrual basis with an economic resources measurement focus and accrual basis of accounting.] [GASBS 10, ¶76, as amended by GASBS 66, ¶3 and GASBS XX, fn10]
.145 [Replace expenditures/expenses with outflows of short-term financial resources/expenses.] [GASBS 10, ¶77, as amended by GASBS 34, ¶6, GASBS 30, ¶10, and GASBS XX, ¶23; GASBS 30, ¶10, as amended by GASBS XX, ¶23]https://auth-viewpoint.pwc.com/assetdetails.html/content/dam/pwc-madison/ditaroot/us/en/gasb/exposure-drafts/gasb-proposed-statement---financial-reporting/Financial-Reporting-Model-Improvements.ditamap
[In renumbered footnote 17, replace expenses/ expenditures with expenses/ outflows of/ short-term financial resources.] [GASBS 62, fn37, as amended by GASBS 63, ¶8 and GASBS XX, ¶23]
.156 [Replace expense/expenditure with expense/outflow of short-term financial resources.] [GASBS 62, ¶101, as amended by GASBS XX, ¶23]
[In renumbered footnote 22, replace balance sheet with short-term financial resources balance sheet.] [GASBS 62, fn42, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]
.701-1 [Delete Paragraph .129 of Section 1600 and.] [GASBIG 2015-1, Q3.7.1, as amended by GASBS XX, ¶12]
[In heading .706, replace Expenditure/Expense with Outflow of Short-Term Financial Resources/Expense.]
.706-1 [Replace paragraph .124 with paragraph .110.] [GASBIG 2015-1, Q3.58.1, as amended by GASBS 84, ¶21 and GASBS XX, ¶20]
.706-8 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.68.1, as amended by GASBS XX, ¶23]
.706-9 [Replace using the modified accrual basis of accounting with applying the short-term financial resources measurement focus and accrual basis of accounting and replace the accrual basis with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.8.4, as amended by GASBS XX, ¶12 and fn10]
.715-1 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.49.1, as amended by GASBS 84, ¶5 and GASBS XX, ¶28]
.715-2 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.49.3, as amended by GASBS XX, ¶28]
.715-3 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.49.4, as amended by GASBS XX, ¶28]
.715-4 [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q3.54.1, as amended by GASBS XX, ¶23]
.716-4 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.56.2, as amended by GASBS XX, ¶23]
.725-2 [Replace current expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.65.2, as amended by GASBS XX, ¶23]
.726-1 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.72.2, as amended by GASBS XX, ¶23]
* * *
COMPENSATED ABSENCES SECTION C60
Sources: [Add GASBS XX; delete GASBI 6.]
[Revise footnote 5 as follows:] For purposes of this section, the term balance sheet includes the government-wide statement of net position, the governmental fund short-term financial resources balance sheet, the proprietary fund statement of fund net position, and the statement of fiduciary net position required to be presented as components of the basic financial statements, as discussed in Section 2200, “Comprehensive Annual Financial Report.” [GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
.111 [Revise the paragraph as follows:] Entities that report compensated absences in governmental funds should recognize compensated absences outflows of short-term financial resources each period applying the short-term financial resources measurement focus and accrual basis of accounting. Short-term transactions are recognized as they occur. Long-term transactions are recognized when payments are due. [GASBS 16, ¶13, as amended by GASBS 34, ¶6 and ¶82 and GASBS XX, ¶12; GASBS XX, ¶23]
[Delete Question .710-1.]
* * *
CONDUIT DEBT OBLIGATIONS SECTION C65
[In the heading before paragraph .109, replace Prepared Using with Presented Applying; add the following to the end of the heading:] and Accrual Basis of Accounting
.109 [Replace prepared using the economic resources measurement focus with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 91, ¶12, as amended by GASBS XX, fn10]
.111 [Replace prepared using the economic resources measurement focus with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 91, ¶14, as amended by GASBS XX, fn10]
[Revise the heading before paragraph .113 as follows:]
Recognition and Measurement in Financial Statements Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
.113 [Replace paragraphs .113 and .114 with the following; renumber subsequent paragraphs:] For conduit debt obligations arising from long-term transactions, an issuer should recognize a fund liability and an outflow of short-term financial resources when a payment to support a conduit debt obligation becomes due if qualitative factors discussed in paragraph .110 indicate that (a) it is more likely than not that the issuer will support debt service payments associated with an additional commitment or (b) it is more likely than not, after an event or circumstance has occurred as described in paragraph .108, that the issuer will support one or more debt service payments for a conduit debt obligation through a voluntary commitment. [GASBS 91, ¶16 and ¶17, as amended by GASBS XX, ¶12, ¶20, and ¶23]
[In heading .705, replace Prepared Using with Presented Applying; add the following to the end of the heading:] and Accrual Basis of Accounting
[Revise heading .706 as follows:]
Recognition and Measurement in Financial Statements Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
* * *
DEBT EXTINGUISHMENTS AND TROUBLED DEBT RESTRUCTURING SECTION D20
.109 [Revise paragraph as follows:] For current and advance refundings resulting in defeasance of general long-term debt, the face amount of the new debt should be reported in net flows from noncurrent activities in the governmental fund receiving the proceeds. For advance refundings, payments to the escrow agent from resources provided by the new debt should be reported in net flows from noncurrent activities. Payments to the escrow agent made from other resources of the entity should be reported in net flows from noncurrent activities. [GASBS 7, ¶8, as amended by GASBS 34, ¶82 and ¶88, GASBS 37, ¶16, and GASBS XX, ¶27]
[In the heading before paragraph .122, replace Using the Economic Resources Measurement Focus with Presented Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting.]
.122 [Replace using the economic resources measurement focus with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 86, ¶5, as amended by GASBS XX, fn10]
[In the heading before paragraph .123, replace Using the Current Financial Resources Measurement Focus with Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting.]
.123 [Revise the paragraph as follows:] Payments to the escrow agent made from existing resources should be reported in net flows from noncurrent activities in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting. [GASBS 86, ¶6, as amended by GASBS XX, ¶12 and ¶27]
[In heading .716, replace Using the Economic Resources Measurement Focus with Presented Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting.]
[In heading .717, replace Using the Current Financial Resources Measurement Focus with Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting.]
.801 [Revise as follows:] [For current refundings that defease general long-term debt, payments] to the escrow agent from resources provided by new debt should be reported in net flows from noncurrent activities. [AICPA SLG 2002, ¶8.80, as amended by GASBS XX, ¶27]
* * *
DEMAND BONDS SECTION D30
.109 [Revise the second and third sentences as follows:] If, because a take out agreement expires, it is necessary to report a liability in a governmental fund for demand bonds previously reported only in the government-wide statement of net position, the liability should be reported as a liability of the governmental fund in which the proceeds of the issue were initially reported with a corresponding debit to an account within the net flows from noncurrent activities classification. In both situations, debt redemptions should be reported as net flows from noncurrent activities of the governmental fund from which debt service is normally reported; the governmental fund liability represented by the demand bonds should be reduced simultaneously by a credit to an account within the net flows from noncurrent activities classification. [GASBI 1, ¶13, as amended by GASBS XX, ¶27; GASBS 34, ¶82, as amended by GASBS 63, ¶8]
* * *
DERIVATIVE INSTRUMENTS SECTION D40
.102 [Revise paragraph as follows:] For derivative instruments reported in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting that produce short-term transactions, the recognition and measurement provisions of this section (paragraphs .115–.125) should be applied. For derivative instruments reported in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting that produce long-term transactions, the recognition and measurement provisions of this section (paragraphs .115–.125) should not be applied. See Section 1600, “Measurement Focus and Basis of Accounting” (paragraphs .105–.118). [GASBS 53, ¶5, as amended by GASBS XX, ¶12]
[Revise footnote 6 as follows:] For purposes of this section, the term statement of net position includes the government-wide statement of net position, the governmental fund short-term financial resources balance sheet, the proprietary fund statement of net position, and the statement of fiduciary net position, required to be presented as components of the basic financial statements as discussed in Section 2200, “Comprehensive Annual Financial Report.” [GASBS 53, fn6, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]
.116 [Revise the second sentence as follows; renumber subsequent footnotes:] Changes in fair values of investment derivative instruments, including derivative instruments that are determined to be ineffective, should be reported within the investment inflows of short-term financial resources/revenue classification on the flow of resources statement.
.166 [Replace expenditures with outflows of short-term financial resources.] [GASBS 53, ¶66, as amended by GASBS XX, ¶23]
.726-6 [Revise the answer as follows:] Financial statements presented applying the economic resources measurement focus and accrual basis of accounting (government-wide financial statements and proprietary and fiduciary funds) should report the up-front payment as an increase of debt. Financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting (governmental funds) should report the up-front payment in net flows from noncurrent activities. [GASBIG 2015-1, Q10.44.2, as amended by GASBS XX, ¶12, ¶27, and fn10]
* * *
ESCHEAT PROPERTY SECTION E70
.103 [Replace the first two sentences with the following:] If escheat property is reported in a governmental fund, escheat inflows of short-term financial resources should be reduced by amounts of liabilities to claimants recognized for claims arising from short-term transactions. If escheat property is reported in a proprietary fund, escheat revenue should be reduced and a liability reported to the extent that it is probable that escheat property will be reclaimed and paid to claimants. The proprietary fund liability should represent the best estimate of the amount ultimately expected to be reclaimed and paid, giving effect to such factors as previous and current trends in amounts reclaimed and paid relative to amounts escheated, and anticipated changes in those trends. [GASBS 21, ¶5, as amended by GASBS 34, ¶6, GASBS 37, ¶3, and GASBS XX, ¶22]
.104 [Replace the accrual basis of accounting with accrual basis of accounting.] [GASBS 37, ¶3, as amended by GASBS 63, ¶8, GASBS 84, ¶18, ¶23, and ¶24, and GASBS XX, fn10]
.702-1 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.6, as amended by GASBS 84, ¶11 and ¶17 and GASBS XX, ¶28]
.702-2 [In the answer, insert the following at the end of the third sentence:] for claims arising from short-term transactions in the governmental fund or corresponding liability in the proprietary fund [GASBIG 2015-1, Q7.52.7, as amended by GASBS 84, ¶17 and ¶18, GASBS XX, ¶12 and ¶20, and GASBIG 2019-2, Q5.2]
.702-3 [Revise answer as follows:] Escheat property may include amounts that (a) will be paid to heirs or beneficiaries, (b) are temporarily held for other governments, or (c) will revert to the government itself, in the absence of rightful heirs or claimants. A governmental or proprietary fund may be used to account for the entire amount (a, b, and c), with associated liabilities. In a governmental fund, the associated liabilities are for the amounts arising from short-term transactions that will be paid to claimants or other governments. In a proprietary fund, the associated liabilities are the amounts that will be paid to claimants or other governments. Alternatively, a governmental or proprietary fund may be used to account for only the amount that is expected to revert to the government, with the amounts held for claimants and amounts held for other governments accounted for in one or more fiduciary funds, as appropriate. [GASBIG 2015-1, Q7.52.8, as amended by GASBS 84, ¶14 and GASBS XX, ¶12 and ¶20]
* * *
FOOD STAMPS SECTION F60
.101 [Revise the paragraph as follows:] In the fund financial statements, state governments should recognize distributions of food stamp benefits as inflows of short-term financial resources and outflows of short-term financial resources in the general fund or a special resources fund, whether the state government distributes the benefits directly or through agents and whether the benefits are in paper or electronic form. Outflows of short-term financial resources should be recognized when the benefits are distributed2 to the individual recipients by the state government or its agents; inflows of short-term financial resources should be recognized at the same time. State governments should report food stamp balances held by them or by their agents at the balance sheet date as an asset offset by a liability.3 Inflows of short-term financial resources, outflows of short-term financial resources, and balances of food stamps should be measured based on face value. [GASBS 24, ¶6, as amended by GASBS 65, ¶31 and GASBS XX, ¶22, ¶23, and ¶28]
.102 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting. [GASBS 34, ¶12, as amended by GASBS XX, fn10]
* * *
INVESTMENTS SECTION I50
.116 [In subparagraph (c), replace extraordinary items with unusual or infrequent items; in subparagraph (d), replace special and extraordinary items with unusual or infrequent items and replace paragraphs .143 with paragraphs .145] [GASBS 62, ¶209, as amended by GASBS 63, ¶8, GASBS 69, ¶39, and GASBS XX, ¶9 and ¶10]
.131 [Replace revenue with inflows of short-term financial resources/revenue.] [GASBS 31, ¶13, as amended by GASBS 81, ¶12 and ¶18 and GASBS XX, ¶22; GASBS 67, ¶24, as amended by GASBS 81, ¶12 and ¶18]
[Revise footnote 10 as follows:] For purposes of this section, the term operating statement includes the government-wide statement of activities; the governmental fund statement of short-term financial resource flows; the proprietary fund statement of revenues, expenses, and changes in fund net position; and the statement of changes in fiduciary net position, required to be presented as components of the basic financial statements, as discussed in Section 2200. [GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
[In footnote 12, replace revenue with inflows of short-term financial resources/revenue.] [GASBS 31, fn8, as amended by GASBS 34, ¶112 and GASBS XX, ¶22]
.136 [Replace using the economic resources measurement focus and the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 31, ¶18, as amended by GASBS 34, ¶106, GASBS 63, ¶8, GASBS 84, ¶5 and ¶18, and GASBS XX, fn10; GASBS 34, ¶106, as amended by GASBS 63, ¶7 and ¶8; GASBS 34, ¶107, as amended by GASBS XX, fn10]
[In footnote 14, replace balance sheets with short-term financial resources balance sheets.] [GASBS 72, fn2, as amended by GASBS XX, ¶11]
[Revise footnote 18 as follows:] For purposes of this section, the term balance sheet includes the government-wide statement of net position, the governmental fund short-term financial resources balance sheet, the proprietary fund statement of fund net position, and the statement of fiduciary net position, required to be presented as components of the basic financial statements, as discussed in Section 2200. [GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
[Revise Question .721-3 as follows:]
.721-3
Q—When investments in real estate are reported at fair value, what inflows of resources and outflows of resources are recognized?
A—All rental, lease, and other fees are recognized as inflows of short-term financial resources/revenue. In addition, fair value increases and decreases are recognized in inflows of short-term financial resources/revenue. No depreciation or amortization is recognized on the property. Investment outflows of short-term financial resources/expenses would include those arising from managing the property.
[GASBIG 2015-1, Q6.20.3, as amended by GASBS XX, ¶22]
.721-4 [Replace revenue with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q6.24.1, as amended by GASBS XX, ¶22]
[Revise Question .721-6 as follows:]
.721-6
Q—Can the change in fair value of investments in the statement of short-term financial resource flows of a governmental fund be reported as a noncurrent activity?
A—No. All activities in governmental funds, except those related to the purchase and disposal of capital assets, the issuance and repayment of capital-related liabilities and long-term debt that is not long-term debt issued for short-term purposes, and unusual or infrequent items should be reported as current activities.
[GASBIG 2015-1, Q6.28.2, as amended by GASBS XX, ¶11 and ¶27]
.721-10 [Replace revenue with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q6.28.6, as amended by GASBS XX, ¶22]
.721-13 [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBIG 2015-1, Q6.31.1, as amended by GASBS XX, ¶22]
.721-15 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q6.31.3, as amended by GASBS XX, ¶28]
.728-3 [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBIG 2015-1, Q1.66.8, as amended by GASBS XX, ¶22]
.733-1 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q1.4.3, as amended by GASBS 93, ¶11 and GASBS XX, ¶28]
* * *
INVESTMENTS—REVERSE REPURCHASE AGREEMENTS SECTION I55
[Revise footnote 4 as follows:] For purposes of this section, the term balance sheet includes the government-wide statement of net position, the governmental fund short-term financial resources balance sheet, the proprietary fund statement of fund net position, and the statement of fiduciary net position required to be presented as components of the basic financial statements, as discussed in Section 2200, “Comprehensive Annual Financial Report.” [GASBI 3, fn1, as amended by GASBS 63, ¶8; GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
[Revise footnote 5 as follows:] Disclosure of default losses and recoveries by defined benefit pension plans does not constitute a disclosure of realized gains and losses that would require disclosure of all realized gains and losses for the period. For purposes of this section, the term operating statement includes the government-wide statement of activities; the governmental fund statement of short-term financial resource flows; the proprietary fund statement of revenues, expenses, and changes in fund net position; and the fiduciary fund statement of changes in net position, required to be presented as components of the basic financial statements, as discussed in Section 2200. [GASBI 3, ¶5, as amended by GASBS 67, ¶24 and GASBS 73, ¶10; GASBI 3, fn2, as amended by GASBS 63, ¶8; GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS 67, fn8; GASBS XX, ¶11]
.115 [Insert the following at the end of the paragraph.] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, assets and liabilities from reverse repurchase and fixed coupon reverse repurchase agreements arising from long-term transactions are recognized when payments are due. [GASBS 3, ¶81, as amended by GASBS XX, ¶19 and ¶20]
.116 The interest cost of reverse repurchase and fixed coupon reverse repurchase agreements should be reported as outflows of short-term financial resources/expenses for interest. The interest cost associated with reverse repurchase or fixed coupon reverse repurchase agreements should not be netted with interest earned on any related investments. [GASBS 3, ¶82, as amended by GASBS XX, ¶23]
.705-2 [Replace special revenue fund with special resources fund.] [GASBIG 2015-1,
Q1.4.3, as amended by GASBS 93, ¶11 and GASBS XX, ¶28]
* * *
INVESTMENTS—SECURITIES LENDING SECTION I60
[Revise footnote 3 as follows:] For purposes of this section, the term balance sheet includes the government-wide statement of net position, the governmental fund short-term financial resources balance sheet, the proprietary fund statement of fund net position, and the statement of fiduciary net position required to be presented as components of the basic financial statements, as discussed in Section 2200, “Comprehensive Annual Financial Report.” [GASBS 28, fn3, as amended by GASBS 63, ¶8; GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
[Revise footnote 6 as follows:] For purposes of this section, the term operating statement includes the government-wide statement of activities; the governmental fund statement of short-term financial resource flows; the proprietary fund statement of revenues, expenses, and changes in fund net position; and the statement of changes in fiduciary net position, required to be presented as components of the basic financial statements, as discussed in Section 2200. [GASBS 28, fn6, as amended by GASBS 63, ¶8; GASBS 34, ¶13, ¶91, and ¶106, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
.104 [Insert the following at the end of the paragraph.] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, liabilities from securities lending transactions arising from long-term transactions are recognized when payments are due. [GASBS 28, ¶6, as amended by GASBS XX, ¶20; GASBS 72, ¶64; GASBS XX, ¶20]
.106 [Revise as follows:] The costs of securities lending transactions should be reported as outflows of short-term financial resources or expenses in the operating statement. These costs include borrower rebates (which should be reported as outflows of short-term financial resources or expenses for interest) and agent fees. The costs of lending securities should not be netted with inflows of short-term financial resources/revenue from interest or income from the investment of cash collateral, any other related investments, or loan premiums or fees. [GASBS 28, ¶8, as amended by GASBS XX, ¶22 and ¶23]
* * *
IRREVOCABLE SPLIT-INTEREST AGREEMENTS SECTION I70
.102 [Replace paragraphs .126–.131 with paragraphs .126–.132; replace the last sentence with the following:] The provisions of paragraphs .107–.125 apply whether the economic resources measurement focus and accrual basis of accounting or the short-term financial resources measurement focus and accrual basis of accounting is applied, except the requirements do not apply to transactions classified as long-term applying the short-term financial resources measurement focus and accrual basis of accounting, unless otherwise noted. Irrevocable split-interest agreements in which a government is the intermediary and the transactions are classified as long-term transactions in applying the short-term financial resources measurement focus and accrual basis of accounting are addressed in paragraph .126. [GASBS 81, ¶5, as amended by GASBS XX, ¶12 and fn10]
.112 [Replace revenue with an inflow of short-term financial resources.] [GASBS 81, ¶15, as amended by GASBS XX, ¶22]
.117 [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBS 81, ¶20, as amended by GASBS XX, ¶22]
.120 [Replace current with short-term; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBS 81, ¶23, as amended by GASBS XX, ¶12, ¶19, and fn10]
.125 [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBS 81, ¶28, as amended by GASBS XX, ¶22]
[Insert new paragraph .126, including heading, as follows; renumber subsequent paragraphs.]
Recognition of Transactions Classified as Long-Term Transactions in Governmental Fund Statements
.126 Financial statements for governmental funds should be presented applying the short-term financial resources measurement focus and accrual basis of accounting, as the terms are discussed in Section 1600, “Measurement Focus and Basis of Accounting.” Transactions arising from irrevocable split-interest agreements for which the government is the intermediary that are classified as long-term transactions should recognize assets, deferred outflows of resources, liabilities, and deferred inflows of resources, as well as inflows of resources and outflows of resources, when payments are due. [GASBS XX, ¶12– ¶25]
.127 [Add the following to the end of the paragraph:] The provisions in paragraphs .127– .131 apply to financial statements presented applying the economic resources measurement focus and accrual basis of accounting. [GASBS 81, ¶29; GASBS 81, ¶30–¶34, as amended by GASBS XX, fn10]
[Insert new paragraph .133, including heading, as follows:]
Recognition in Financial Statements Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
.133 In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, if a third-party is the intermediary of an irrevocable split-interest agreement, a government should recognize assets, deferred inflows of resources, and inflows of resources in accordance with paragraphs .128–.132 of this section to the extent they meet the recognition criteria for short-term financial resources in paragraphs .128–.134 of Section 1600, “Measurement Focus and Basis of Accounting.” [GASBS 81, ¶30–¶34, as amended by GASBS XX, ¶12–¶25]
.704-1 [Replace A university with A university reported as a business-type activity.] [GASBIG 2019-1, Q4.13, as amended by GASBS XX, ¶22 and ¶25] [Delete Question .705-1.]
* * *
ACCOUNTING FOR PARTICIPATION IN JOINT VENTURES AND JOINTLY GOVERNED ORGANIZATIONS SECTION J50
.107 [Replace under the current financial resources measurement focus with applying the short-term financial resources measurement focus and accrual basis of accounting; replace balance sheet with short-term financial resources balance sheet; replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows; and delete revenue or expenditure. Insert the following at the end of the fourth sentence:] applying the short-term financial resources measurement focus and accrual basis of accounting [GASBS 14, ¶74, as amended by GASBS 34, ¶6, GASBS 61, ¶10, and GASBS XX, ¶11, ¶12, ¶22, and ¶23; GASBS 34, ¶80 and ¶82, as amended by GASBS 63, ¶8]
.114 [Replace the fifth and sixth sentences with the following:] An additional consequence of the absence of a formal organizational structure is that there is no entity with assets, liabilities, outflows of short-term financial resources/expenses, and inflows of short-term financial resources/revenues—and thus, equity—to allocate to participants. A government participating in this type of arrangement should report its assets, liabilities, outflows of short-term financial resources/expenses, and inflows of short-term financial resources/revenues based on the measurement focus and basis of accounting used that are associated with the joint operation. [GASBS 14, ¶80, as amended by GASBS XX, ¶22 and ¶23]
.706-2 [Replace under the current financial resources measurement focus and the modified accrual basis of accounting with applying the short-term financial resources measurement focus and accrual basis of accounting; replace balance sheet with short-term financial resources balance sheet; replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows; and delete revenue or expenditure. Insert the following at the end of the fourth sentence of the answer:] applying the short-term financial resources measurement focus and accrual basis of accounting [GASBIG 2015-1, Q7.62.3, as amended by GASBS XX, ¶11, ¶12, ¶22, and ¶23]
.713-1 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses; replace revenues with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q4.57.1, as amended by GASBS XX, ¶22 and ¶23]
.713-2 [Replace expenditures/expenses with outflows of short-term financial resources/ expenses; replace revenues with inflows of short-term financial resources/revenues. Insert the following at the end of the first sentence of the answer:] applying the short-term financial resources measurement focus and accrual basis of accounting [GASBIG 2015-1, Q4.57.2, as amended by GASBS XX, ¶22 and ¶23]
* * *
LANDFILL CLOSURE AND POSTCLOSURE CARE COSTS SECTION L10
Sources: [Delete GASBI 6.]
[In footnote 2, replace an economic and a current financial resources measurement focus with applying the economic resources measurement focus and accrual basis of accounting and applying the short-term financial resources measurement focus and accrual basis of accounting.] [GASBS 18, fn2, as amended by GASBS 34, ¶16 and ¶92, and GASBS XX, ¶12 and fn10]
[Revise footnote 5 as follows:] For purposes of this section, the term balance sheet includes the government-wide statement of net position, the governmental fund short-term financial resources balance sheet, and the proprietary fund statement of fund net position. [GASBS 34, ¶13 and ¶91, as amended by GASBS 63, ¶8; GASBS XX, ¶11]
.109 [Revise as follows:] For MSWLFs reported in governmental fund financial statements, the measurement of the liability for MSWLF closure and postclosure care should be consistent with paragraph .106 for proprietary funds. MSWLF outflows of short-term financial resources and liabilities should be recognized in governmental funds applying the short-term financial resources measurement focus and accrual basis of accounting. [GASBS 18, ¶10, as amended by GASBS 34, ¶18 and ¶119 and GASBS XX, ¶12]
.112 [Replace modified accrual basis of accounting with short-term financial resources measurement focus and accrual basis of accounting.] [GASBS 18, ¶14, as amended by GASBS XX, ¶12]
.113 [Replace special revenue with special resources and reported as revenue with reported as inflows of short-term financial resources or revenue.] [GASBS 18, ¶15, as amended by GASBS XX, ¶22 and ¶28]
.701-2 [Revise the third sentence in the answer as follows:] This section requires recognition of the estimated total current cost of closure and postclosure care applying the appropriate measurement focus and basis of accounting. [GASBIG 2015-1, QZ.49.2, as amended by GASBS XX, ¶12]
* * *
LEASES SECTION L20
.107 [Replace prepared using with presented applying; replace the economic resources measurement focus with the economic resources measurement focus and accrual basis of accounting; replace the current financial resources measurement focus with the short-term financial resources measurement focus and accrual basis of accounting.] [GASBS 87, ¶10, as amended by GASBS XX, ¶12 and fn10; GASBS 93, ¶13 and ¶14]
[In the heading before paragraph .132, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end:] and Accrual Basis of Accounting
.133 [Revise as follows:] For leases that are long-term transactions, an inflow of short-term financial resources and an outflow of short-term financial resources should be reported in the period the lease is initially recognized. The inflow of short-term financial resources and outflow of short-term financial resources should be measured as provided in paragraphs .118–.120. Subsequent governmental fund lease payments should be accounted for consistent with principles for debt service payments on general long-term debt. [GASBS 87, ¶36, as amended by GASBS XX, ¶22 and ¶23]
[In the heading before paragraph .153, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end:] and Accrual Basis of Accounting
.153 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a lessor should recognize the amount of any payments received at or before the commencement of the lease term that relate to future periods as a deferred inflow of resources. A lessor subsequently should recognize the deferred inflow of resources as inflows of resources in a systematic and rational manner over the term of the lease. [GASBS 87, ¶56, as amended by GASBS XX, ¶12, ¶22, and ¶24]
.181 [Replace prepared using the economic resources measurement focus with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 87, ¶83, as amended by GASBS XX, fn10]
[In heading .710, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end:] and Accrual Basis of Accounting
[In heading .718, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end:] and Accrual Basis of Accounting
.731-1 [Replace economic resources measurement focus with economic resources measurement focus and accrual basis of accounting; delete the last sentence of the answer.] [GASBIG 2019-3, Q4.70, as amended by GASBS XX, ¶23 and fn10]
* * *
NONEXCHANGE FINANCIAL GUARANTEES SECTION N30
[In the heading before paragraph .105, replace Prepared Using the Economic Resources Measurement Focus with Presented Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting.]
.105 [Replace prepared using the economic resources measurement focus with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 70, ¶9, as amended by GASBS XX, fn10]
[In the heading before paragraph .106, replace Prepared Using the Current Financial Resources Measurement Focus with Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting.]
.106 [Revise as follows:] When qualitative factors and historical data, if any, as discussed in paragraphs .103 and .104, indicate that it is more likely than not that a government will be required to make a payment related to the nonexchange financial guarantees it extended for liabilities of other entities or individuals, the government should recognize a fund liability and an outflow of short-term financial resources in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, to the extent the liability is due. Classification of outflows of short-term financial resources related to nonexchange financial guarantees should be determined in the same manner as grants or financial assistance payments to other entities or individuals. [GASBS 70, ¶10, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.107 [Replace Under both the economic resources measurement focus and the current financial resources measurement focus with in financial statements presented applying either the economic resources measurement focus and accrual basis of accounting or the short-term financial resources measurement focus and accrual basis of accounting.] [GASBS 70, ¶11, as amended by GASBS XX, ¶12 and fn10]
[In heading .704, replace Prepared Using the Economic Resources Measurement Focus with Presented Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting.]
[In heading .705, replace Prepared Using the Current Financial Resources Measurement Focus with Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting.]
* * *
NONEXCHANGE TRANSACTIONS SECTION N50
Sources: [Add GASBS XX.]
.108 [Revise as follows:] All standards in paragraphs .109–.125 of this section apply whether the economic resources measurement focus and accrual basis of accounting or the short-term financial resources measurement focus and accrual basis of accounting is applied, except the recognition requirements do not apply to transactions classified as long-term transactions applying the short-term financial resources measurement focus and accrual basis of accounting. When the short-term financial resources measurement focus and accrual basis of accounting is applied for governmental funds in the fund financial statements, the requirements in paragraphs .109–.125 of this section for the recognition of (a) revenues should be interpreted as requirements for recognition of inflows of short-term financial resources and (b) expenses should be interpreted as requirements for the recognition of outflows of short-term financial resources. For recognition of transactions classified as long-term transactions in the application of the short-term financial resources measurement focus and accrual basis of accounting, the standards in paragraphs .119 and .126 apply. Recognition of nonexchange transactions in the financial statements is required unless the transactions are not measurable (reasonably estimable) or are not probable of collection. Transactions that are not recognizable because they are not measurable should be disclosed. [GASBS 33, ¶11, as amended by GASBS 35, ¶5 and GASBS XX, ¶12–¶25]
.109 [Replace expended with used.] [GASBS 33, ¶12, as amended by GASBS XX, ¶27]
.124 [Delete accrual-basis.] [GASBS 33, ¶27, as amended by GASBS XX, fn10]
.125 [Delete accrual-basis; replace accrued with recognized.] [GASBS 36, ¶2, as amended by GASBS XX, fn10]
[Revise the heading before paragraph .126 as follows:] Recognition of Transactions Classified as Long-Term Transactions in Governmental Fund Statements
.126 [In the first sentence, replace using with applying and replace current with short-term. Replace the last sentence, including the footnote, with the following; renumber subsequent footnotes.] Nonexchange transactions classified as long-term transactions should recognize assets, deferred outflows of resources, liabilities, and deferred inflows of resources, as well as inflows of resources and outflows of resources, when payments are due. [GASBS 33, ¶29, as amended by GASBS XX, ¶12, ¶13, ¶22; GASBS XX, ¶12–¶25]
[Delete paragraph .127; renumber subsequent paragraphs.]
.127 [Replace revenue and expenditures or with inflows of short-term financial resources/ revenues and outflows of short-term financial resources/.] [GASBS 24, ¶4, as amended by GASBS 35, ¶5; GASBS 24, ¶5, as amended by GASBS 35, ¶5, GASBS 84, ¶18, and GASBS XX, ¶22 and ¶23; GASBS 34, ¶6]
.129 [Replace revenue and expenditures or with inflows of short-term financial resources/ revenues and outflows of short-term financial resources/.] [GASBS 24, ¶8, as amended by GASBS XX, ¶22 and ¶23]
[Revise the heading before paragraph .130 as follows:] Inflows of Short-Term Financial Resources/Revenues
.130 [Replace revenue with inflows of short-term financial resources/revenues.] [GASBS 24, ¶8, as amended by GASBS 73, ¶33, ¶59, ¶76, and ¶122, GASBS 75, ¶43, ¶69, ¶107, ¶114, ¶157, ¶183, and ¶201, GASBS 85, ¶9–¶11, and GASBS XX, ¶22; GASBS 85, ¶11, as amended by GASBS XX, ¶22]
[Revise the heading before paragraph .131 as follows:] Outflows of Short-Term Financial Resources/Expenses
.131 [Replace expenditures or expenses with outflows of short-term financial resources/ expenses.] [GASBS 24, ¶8, as amended by GASBS 68, ¶33, ¶53, and ¶123, GASBS 73, ¶33, ¶52, ¶70, and ¶102, GASBS 75, ¶43, ¶63, ¶101, ¶110, ¶157, ¶176, ¶195, and ¶230, GASBS 85, ¶9, and GASBS XX, ¶23]
.132 [Replace expenditures or expenses with outflows of short-term financial resources/ expenses; replace revenue with inflows of short-term financial resources/revenues.] [GASBS 24, ¶8, as amended by GASBS XX, ¶22 and ¶23]
.136 [Replace revenue and expenditures or with inflows of short-term financial resources/ revenues and outflows of short-term financial resources/.] [GASBS 24, ¶11, as amended by GASBS 35, ¶5 and GASBS XX, ¶22 and ¶23]
.138 [Replace expenditures or with outflows of short-term financial resources/; revise the second sentence as follows:] For example, if a state government classifies state aid payments to school districts as education outflows of short-term financial resources/expenses, on-behalf payments of pension contributions for the school districts also should be classified as education outflows of short-term financial resources/expenses, rather than as pension outflows of short-term financial resources/expenses. [GASBS 24, ¶13, as amended by GASBS 34, ¶16 and GASBS XX, ¶23]
.701-4 [Replace revenue with inflows of short-term financial resources/revenues.] [GASBIG 2016-1, Q4.70, as amended by GASBS XX, ¶22]
.704-1 [Replace revenue with inflow of short-term financial resources/revenue.] [GASBIG 2015-1, QZ.33.5, as amended by GASBS XX, ¶22]
.705-1 [Replace expense/expenditure with outflow of short-term financial resources/ expense.] [GASBIG 2015-1, QZ.33.6, as amended by GASBS XX, ¶23]
.707-1 [Replace revenues with inflows of short-term financial resources/revenues and replace (or as deferred inflows of resources in governmental funds if not available) with except when applying the short-term financial resources measurement focus and accrual basis of accounting for transactions classified as long-term transactions.] [GASBIG 20151, QZ.33.9, as amended by GASBS XX, ¶12 and ¶22]
.708-1 [Replace revenue with inflows of short-term financial resources/revenues; add the following at the end of the first sentence of the answer:] , except for when applying the short-term financial resources measurement focus and accrual basis of accounting for transactions classified as long-term transactions [GASBIG 2015-1, QZ.33.10, as amended by GASBS XX, ¶12 and ¶22]
.708-2 [Revise the first sentence of the question as follows:] Paragraph .115 of this section states that “governments should recognize revenues from property taxes, net of estimated refunds and estimated uncollectible amounts, in the period for which the taxes are levied. . . .” (The paragraph also applies to recognition of inflows of short-term financial resources, except for transactions classified as long-term transactions, when applying the short-term financial resources measurement focus and accrual basis of accounting.) [GASBIG 2015-1, QZ.33.11, as amended by GASBS XX, ¶12 and ¶22]
.708-4 [Replace expenditures and expenses with outflows of short-term financial resources and expenses; replace revenue with inflows of short-term financial resources and revenues; and replace revenues with inflows of short-term financial resources and revenues.] [GASBIG 2015-1, QZ.33.24 as amended by GASBS XX, ¶22 and ¶23]
.710-1 [Replace revenue with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, QZ.33.16, as amended by GASBS XX, ¶22]
[Revise Question .710-2 as follows:]
.710-2
Q—A government is awarded an expenditure-driven grant for construction of a facility. Could recognition of inflows of short-term financial resources/revenues be delayed until construction is complete, similar to the completed-contract method?
A—No. Inflows of short-term financial resources/revenues from expenditure-driven (reimbursement) grants, including those used for capital projects, should be recognized as outlays are incurred, provided all other eligibility requirements are met (and are short-term transactions if reported in governmental funds).
[GASBIG 2015-1, QZ.33.18, as amended by GASBS XX, ¶22 and ¶23]
.711-1 [Replace expenditures with costs; replace paragraph .118 of this section requires with paragraphs .118 and .126 of this section require; replace accrual or the modified accrual with economic resources measurement focus and accrual basis of accounting or the short-term financial resources measurement focus and accrual; and insert (and are short-term transactions if reported in governmental funds) at the end of the answer.] [GASBIG 2015-1, QZ.33.15, as amended by GASBS XX, ¶20, ¶23, and fn10]
.711-3 [Replace expenses with outflows of short-term financial resources/expenses and revenues with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, QZ.33.20, as amended by GASBS XX, ¶22 and ¶23]
.711-4 [Replace A university with A university reported as a business-type activity.] [GASBIG 2019-1, Q4.13, as amended by GASBS XX, ¶22 and ¶25]
.711-5 [Revise the answer as follows:] When a nongovernmental provider does not specify otherwise, governments should recognize voluntary nonexchange transactions in full in the first period that use is permitted and all other applicable eligibility requirements have been met (and are short-term transactions if reported in governmental funds). [GASBIG 2015-1, QZ.33.21, as amended by GASBS XX, ¶12 and ¶22]
.711-6 [Replace revenue with inflows of short-term financial resources/revenues; insert (and are short-term transactions if reported in governmental funds) at the end of the answer.] [GASBIG 2019-1, Q4.7, as amended by GASBS XX, ¶12 and ¶22]
.711-7 [Revise the answer as follows:] The measurement focus of governmental funds is short-term financial resources. Therefore, if a capital asset is donated to a government, no asset or inflow of short-term financial resources is recorded in the governmental fund. [GASBIG 2016-1, Q4.71, as amended by GASBS XX, ¶12 and ¶19]
.713-2 [Delete (subject to the availability criterion in governmental funds).] [GASBIG 2015-1, QZ.33.8, as amended by GASBS XX, ¶12 and ¶17]
[Revise heading .714 as follows:]
.714 Recognition of Transactions Classified as Long-Term Transactions in Governmental Fund Statements
.714-1 [Revise the answer as follows:] The measurement focus of governmental funds is short-term financial resources. Therefore, if a capital asset is donated to a government, no asset or inflow of short-term financial resources is recorded in the governmental fund. [GASBIG 2016-1, Q4.71, as amended by GASBS XX, ¶12 and ¶19]
.715-1 [In the question, replace federal reimbursement with federal payment, replace expenditures with costs, and delete ,or revenue and expense; in the answer, replace revenue or expense from the grant with inflows of short-term financial resources/revenues or outflows of short-term financial resources/expenses from the grant; and in the last sentence, replace revenue with inflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.5, as amended by GASBS XX, ¶22 and ¶23]
.715-2 [Replace revenues and expenses or expenditures with inflows of short-term financial resources/revenues and outflows of short-term financial resources/expenses; replace nonoperating with inflows of short-term financial resources/; add the following at the end of the answer:] Furthermore, recipient governments that report their activities in a proprietary fund would report Pell Grants as operating revenues. [GASBIG 2015-1, Q7.72.10, as amended by GASBS 84, ¶5 and GASBS XX, ¶22, ¶23, ¶31, and ¶32]
.718-1 [Replace revenues and expenditures with inflows of short-term financial resources and outflows of short-term financial resources; replace in the funds with in the governmental funds.] [GASBIG 2015-1, QZ.24.1, as amended by GASBS XX, ¶22 and ¶23 and GASBIG 2016-1, Q5.38]
.801 [Replace revenues with inflows of short-term financial resources/revenues.] [AICPA SLG 2002, ¶8.34, as amended by GASBS XX, ¶22]
* * *
PENSION ACTIVITIES—REPORTING FOR BENEFITS PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED BENEFIT SECTION P20
[In footnote 2, replace expenditures with outflows of short-term financial resources.] [GASBS 68, fn2, as amended by GASBS 82, ¶8 and GASBS XX, ¶23]
.107 [Revise the sources as follows:] GASBS 68, ¶9; GASBS 78, ¶5−¶10; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.109 [Revise the sources as follows:] GASBS 68, ¶11; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.110 [Revise the sources as follows:] GASBS 68, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.111 [Revise the sources as follows:] GASBS 68, ¶13, as amended by GASBS 78, ¶2; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.116 [Replace expense/expenditures with expense/outflows of short-term financial resources.] [GASBS 68, ¶17, as amended by GASBS XX, ¶23]
.117 [Revise the sources as follows:] GASBS 68, ¶18; GASBS 85, ¶9, as amended by
GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
[In the heading before paragraph .119, replace prepared using with presented applying.]
[In the heading before paragraph .134, replace prepared using with presented applying.]
[In the heading before paragraph .135, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.135 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a net pension liability should be recognized to the extent that the liability measured as of the end of the reporting period is for benefit payments that are due and the pension plan’s fiduciary net position is not sufficient for payment of those benefits. Pension outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the employer (and by nonemployer contributing entities, if any) to the pension plan and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of amounts due. Pension outflows of short-term financial resources include amounts for payables to a pension plan. [GASBS 68, ¶36, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.136 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by nonemployer contributing entities to the pension plan and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. Both (a) and (b) include amounts for payables to a pension plan. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.137 [Replace expense/expenditures with expense/outflows of short-term financial resources.] [GASBS 68, ¶37, as amended by GASBS XX, ¶23]
.143 [Insert measurement focus and before basis of accounting.] [GASBS 68, ¶43, as amended by GASBS XX, fn10]
[In the second heading before paragraph .148, replace prepared using with presented applying.]
[In the heading before paragraph .173, replace prepared using with presented applying.]
[In the heading before paragraph .174, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.174 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, an employer’s proportionate share of the collective net pension liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due and the pension plan’s fiduciary net position is not sufficient for payment of those benefits. Pension outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the employer (and, to the extent associated with the employer, by nonemployer contributing entities, if any) to the pension plan and (b) the change between the employer’s (and to the extent associated with the employer, nonemployer contributing entities’, if any) beginning and ending balances of amounts due. Pension outflows of short-term financial resources include amounts for payables to a pension plan. [GASBS 68, ¶73, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.175 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the portion of the following amount that is associated with the employer: the total of (a) amounts paid during the reporting period by nonemployer contributing entities to the pension plan and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. Both (a) and (b) include amounts for payables to a pension plan. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.176 [Replace expense/expenditures with expense/outflows of short-term financial resources.] [GASBS 68, ¶74, as amended by GASBS XX, ¶23]
.181 [Insert measurement focus and before basis of accounting.] [GASBS 68, ¶79, as amended by GASBS XX, fn10]
[In the second heading before paragraph .185, replace prepared using with presented applying.]
.193 [Replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBS 68, ¶91, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
[In the second heading before paragraph .194, replace prepared using with presented applying.]
.199 [Replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBS 68, ¶96, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
[In the second heading before paragraph .200, replace prepared using with presented applying.]
[In the heading before paragraph .211, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.211 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a governmental nonemployer contributing entity’s proportionate share of the collective net pension liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due and the pension plan’s fiduciary net position is not sufficient for payment of those benefits. Outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the governmental nonemployer contributing entity to the pension plan and (b) the change between the beginning and ending balances of amounts due. Outflows of short-term financial resources include amounts for payables to the pension plan. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 68, ¶107, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23]
.216 [Insert measurement focus and before basis of accounting.] [GASBS 68, ¶112, as amended by GASBS XX, fn10]
.222 [Revise the sources as follows:] GASBS 68, ¶118; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.223 [Replace Expense/expenditures with Expense/outflows of short-term financial resources.] [GASBS 68, ¶119, as amended by GASBS XX, ¶23]
.224 [Replace prepared using with presented applying.] [GASBS 68, ¶120, as amended by GASBS XX, fn10; GASBS 73, ¶118]
.225 [Revise the paragraph as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a payable to a defined benefit pension plan should be recognized to the extent that amounts are due pursuant to contractual arrangements or legal requirements. Outflows of short-term financial resources for payables to a defined benefit pension plan should be recognized in accordance with paragraph .135, paragraph .174, paragraph .193, paragraph .199, or paragraph .211, as applicable. [GASBS 68, ¶121, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23]
[In the heading before paragraph .227, replace Prepared Using with Presented Applying.]
[In the heading before paragraph .228, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end of the heading:] and Accrual Basis of Accounting
.228 [Replace expenditures with outflows of short-term financial resources; replace normally expected to be liquidated with expendable available financial resources with due.] [GASBS 78, ¶6, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.229 [Revise as follows:] A payable should be recognized to the extent it is due (that is, for (a) the unpaid required contributions that are associated with pay periods within the reporting period and (b) the portion of any separate liabilities to the pension plan that is due pursuant to contractual arrangements or legal requirements). [GASBS 78, ¶7, as amended by GASBS XX, ¶12 and ¶20]
[In the heading before paragraph .601, replace Expenditures with Outflows of Short-Term Financial Resources; replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
.601 [Replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBTB 2004-2, ¶1, as amended by GASBS 68, ¶4−¶6 and ¶121, GASBS 73, ¶10 and ¶116, GASBS 78, ¶3, and GASBS XX, ¶12]
[In Question 1, replace expenditure recognition with recognition of outflows of short-term financial resources.] [GASBTB 2004-2, ¶5, as amended by GASBS 68, ¶4−¶6 and ¶121, GASBS 73, ¶10, and GASBS XX, ¶23]
[Revise Question 2 as follows:] How should the requirements of paragraph .225 of this section, as applicable, be applied to recognize governmental fund outflows of short-term financial resources and liabilities, as applicable, in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting for pension contributions to cost-sharing plans? [GASBTB 2004-2, ¶7, as amended by GASBS 68, ¶4−¶6 and ¶121, GASBS 73, ¶10, and GASBS XX, ¶12 and ¶23]
[In the first paragraph of the response to Question 2, replace prepared on the modified with presented applying the short-term financial resources measurement focus and; replace expenditures with outflows of short-term financial resources.] [GASBTB 2004-2, ¶8, as amended by GASBS XX, ¶12 and ¶23]
[In the second paragraph of the response to Question 2, replace a pension expenditure with pension outflows of short-term financial resources.] [GASBTB 2004-2, ¶9, as amended by GASBS XX, ¶23]
.701-3 [Replace expense with expenses/outflows of short-term financial resources and replace revenue with revenues/inflows of short-term financial resources.] [GASBIG 20151, Q5.116.3, as amended by GASBS 78, ¶2, GASBS 85, ¶9 and ¶10, and GASBS XX, ¶22 and ¶23]
[In heading .709, replace prepared using with presented applying.]
.710-11 [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-1, Q4.11, as amended by GASBS XX, ¶11]
.718-27 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.143.1, as amended by GASBS XX, fn10]
.718-28 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.32, as amended by GASBS XX, fn10]
.718-29 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.33, as amended by GASBS XX, fn10]
[In heading .719, replace prepared using with presented applying.]
[In heading .720, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.720-1 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.145.1, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.24]
.720-2 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.145.2, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.25]
[In heading .730 replace prepared using with presented applying.]
.731-16 [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-1, Q4.11, as amended by GASBS XX, ¶11]
.732-2 [Replace prepared using with presented applying.] [GASBIG 2015-1, Q5.165.2, as amended by GASBS XX, fn10]
.736-1 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.169.1, as amended by GASBS XX, fn10]
.736-2 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.32, as amended by GASBS XX, fn10]
.736-3 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.33, as amended by GASBS XX, fn10]
[In heading .748, replace prepared using with presented applying.]
[In heading .749, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.749-1 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.185.1, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.26]
.749-2 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.185.2, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.27]
[In heading .760, replace prepared using with presented applying.]
.766-1 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.204.1, as amended by GASBS XX, fn10]
[In heading .769, replace prepared using with presented applying.]
[In heading .774, replace prepared using with presented applying.]
.780-1 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.223.1, as amended by GASBS XX, fn10]
.780-2 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.32, as amended by GASBS XX, fn10]
.780-3 [Replace prepared using with presented applying; replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.33, as amended by GASBS XX, fn10]
[In heading .781, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.781-1 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.224.1, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.28]
.781-2 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.224.2, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.29]
.793-1 [Replace expense/expenditures with expense/outflows of short-term financial resources.] [GASBIG 2015-1, Q5.242.1, as amended by GASBS XX, ¶23]
* * *
PENSION ACTIVITIES—REPORTING FOR BENEFITS PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED CONTRIBUTION SECTION P21
[In footnote 2, replace expenditures with outflows of short-term financial resources.] [GASBS 68, fn2, as amended by GASBS 82, ¶8 and GASBS XX, ¶23]
.108 [Revise the sources as follows:] GASBS 68, ¶16; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.109 [Replace prepared using with presented applying.] [GASBS 68, ¶123, as amended by GASBS XX, fn10]
.110 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, pension outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the employer (and by nonemployer contributing entities, if any) to the pension plan and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. [GASBS 68, ¶124, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.113 [Replace prepared using with presented applying.] [GASBS 68, ¶127, as amended by GASBS XX, fn10]
.114 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, the requirements in paragraph .110 should be applied. In addition, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by nonemployer contributing entities to the pension plan and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 68, ¶128, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.116 [Replace prepared using with presented applying.] [GASBS 68, ¶129, as amended by GASBS XX, fn10]
.117 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the governmental nonemployer contributing entity to the pension plan and (b) the change between the beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 68, ¶130, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.121 [Revise the sources as follows:] GASBS 68, ¶134; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.122 [Replace expenditures with outflows of short-term financial resources.] [GASBS 68, ¶135, as amended by GASBS XX, ¶23]
* * *
PENSION ACTIVITIES—REPORTING FOR BENEFITS NOT PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED BENEFIT SECTION P22
.106 [Revise the sources as follows:] GASBS 73, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10 as amended by GASBS XX, ¶12, ¶22, and ¶23
.110 [Revise the sources as follows:] GASBS 73, ¶17; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10 as amended by GASBS XX, ¶12, ¶22, and ¶23
.113 [Revise the sources as follows:] GASBS 73, ¶22; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.114 [Revise the sources as follows:] GASBS 73, ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.115 [Revise the sources as follows:] GASBS 73, ¶24; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
[In second heading before paragraph .116, replace Prepared Using with Presented Applying.]
[In heading before paragraph .127, replace Prepared Using with Presented Applying.]
[In heading before paragraph .128, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
.128 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a total pension liability (or, if an employer has a special funding situation, a proportionate share of the collective total pension liability) should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due. Pension outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the employer (and by nonemployer contributing entities, if any) for pensions as the benefits come due and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of amounts due. Pension outflows of short-term financial resources also should be recognized for costs incurred during the reporting period by the employer related to the administration of pensions. [GASBS 73, ¶37, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.129 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by nonemployer contributing entities for pensions as the benefits come due and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.130 [Replace expenditures with outflows of short-term financial resources.] [GASBS 73, ¶38, as amended by GASBS XX, ¶23]
[In second heading before paragraph .139, replace prepared using with presented applying.]
[In heading before paragraph .152, replace prepared using with presented applying; replace current with short-term; delete modified.]
.152 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, the government’s proportionate share of the collective total pension liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due. Pension outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the government (and, to the extent associated with the government, by nonemployer contributing entities, if any) for pensions as the benefits come due and (b) the change between the government’s (and, to the extent associated with the government, nonemployer contributing entities’, if any) beginning and ending balances of amounts due. Pension outflows of short-term financial resources also should be recognized for costs incurred during the reporting period by the government related to the administration of pensions. [GASBS 73, ¶60, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.153 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the portion of the following amount that is associated with the government: the total of (a) amounts paid during the reporting period by nonemployer contributing entities for pensions as the benefits come due and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.154 [Replace expenditures with outflows of short-term financial resources.] [GASBS 73, ¶61, as amended by GASBS XX, ¶23]
[In second heading before paragraph .161, replace prepared using with presented applying.]
.170 [Replace prepared using with presented applying; replace current with short-term; delete modified.] [GASBS 73, ¶77, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS ¶12, ¶22, and ¶23]
[In second heading before paragraph .171, replace prepared using with presented applying.]
[In heading before paragraph .181, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.181 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a governmental nonemployer contributing entity’s proportionate share of the collective total pension liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due. Outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the governmental nonemployer contributing entity for pensions as the benefits come due and (b) the change between the beginning and ending balances of amounts due. Outflows of short-term financial resources also should be recognized for costs incurred during the reporting period by the governmental nonemployer contributing entity related to the administration of pensions. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 73, ¶88, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23]
.190 [Revise the sources as follows:] GASBS 73, ¶97; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.191 [Replace expenditures with outflows of short-term financial resources.] [GASBS 73, ¶98, as amended by GASBS XX, ¶23]
.192 [Replace prepared using with presented applying.] [GASBS 73, ¶99, as amended by GASBS XX, fn10]
.193 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, pension outflows of short-term financial resources related to insured benefits should be recognized equal to the total of (a) the amount of premiums paid or other payments made by the employer to the insurer and (b) the change between the beginning and ending balances of amounts for payments due pursuant to legal requirements, including contractual arrangements. [GASBS 73, ¶100, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.194 [Replace expenditure with outflows of short-term financial resources.] [GASBS 73, ¶101, as amended by GASBS XX, ¶23]
[In heading .707, replace Prepared Using with Presented Applying.]
[In heading .715, replace Prepared Using with Presented Applying.]
[In heading .716, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
[In heading .724, replace prepared using with presented applying.]
[In heading .733, replace prepared using with presented applying; replace current with short-term; and delete modified.]
[In heading .742, replace prepared using with presented applying.]
[In heading .753, replace prepared using with presented applying.]
[In heading .760, replace prepared using with presented applying; replace current with short-term; and delete modified.]
* * *
PENSION ACTIVITIES—REPORTING FOR BENEFITS NOT PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED CONTRIBUTION SECTION P24
.107 [Revise the sources as follows:] GASBS 73, ¶21; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.108 [Replace prepared using with presented applying.] [GASBS 73, ¶102, as amended by GASBS XX, fn10]
.109 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the employer (and by nonemployer contributing entities, if any) for pensions as the benefits come due and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of benefit payments due pursuant to legal requirements, including contractual arrangements. [GASBS 73, ¶103, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.112 [Replace prepared using with presented applying.] [GASBS 73, ¶106, as amended by GASBS XX, fn10]
.113 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, the requirements in paragraph .109 should be applied. In addition, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by nonemployer contributing entities for pensions as the benefits come due and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 73, ¶107, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.115 [Replace prepared using with presented applying.] [GASBS 73, ¶108, as amended by GASBS XX, fn10]
.116 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the governmental nonemployer contributing entity for pensions as the benefits come due and (b) the change between the beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 73, ¶109, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.120 [Revise the sources as follows:] GASBS 73, ¶113; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.121 [Replace expenditures with outflows of short-term financial resources.] [GASBS 73, ¶114, as amended by GASBS XX, ¶23]
* * *
POLLUTION REMEDIATION OBLIGATIONS SECTION P40
.121 [Replace special item, or extraordinary with or an unusual or infrequent.] [GASBS 49, ¶23, as amended by GASBS 63, ¶8 and GASBS XX, ¶9 and ¶10]
.122 [Revise as follows:] For goods and services used for pollution remediation activities, liabilities and outflows of short-term financial resources generally should be recognized as they occur. The accumulation of resources in a governmental fund for eventual payment of unmatured general long-term indebtedness, including pollution remediation liabilities, does not constitute an outflow of short-term financial resources and should not result in the recognition of an additional governmental fund liability or outflow of short-term financial resources. In the statement of short-term financial resource flows, any facilities and equipment acquisitions for pollution remediation activities should be recognized as outflows of short-term financial resources. Estimated recoveries of pollution remediation outlays from insurers and other responsible parties or PRPs for which the government is performing remediation activities should reduce any associated pollution remediation outflows of short-term financial resources when the recoveries are recognized. [GASBS 49, ¶24, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.505 [Replace expenditures with outflows of short-term financial resources.] [GASBS 49, ¶28, as amended by GASBS XX, ¶23]
* * *
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS—REPORTING FOR BENEFITS PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED BENEFIT SECTION P50
[In footnote 2, replace expenditures with outflows of short-term financial resources.] [GASBS 75, fn2, as amended by GASBS 85, ¶15 and GASBS XX, ¶23]
.105 [Revise the sources as follows:] GASBS 75, ¶9; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶16–¶25
.111 [Revise the sources as follows:] GASBS 75, ¶15, as amended by GASBS 85, ¶18; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
.117 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶21, as amended by GASBS XX, ¶23]
.120 [Revise the sources as follows:] GASBS 75, ¶24; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
.121 [Revise the sources as follows:] GASBS 75, ¶25; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
[In the second heading before paragraph .123, replace prepared using with presented applying.]
[In the heading before paragraph .141, replace prepared using with presented applying.]
[In the heading before paragraph .142, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.142 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a net OPEB liability12 should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due and the OPEB plan’s fiduciary net position is not sufficient for payment of those benefits. OPEB outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the employer (and by nonemployer contributing entities, if any) to the OPEB plan, including amounts paid for OPEB as the benefits come due, and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of amounts due. OPEB outflows of short-term financial resources include amounts for payables to an OPEB plan. [GASBS 75, ¶46, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
________________________
1[Insert current footnote 12.]
.143 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by nonemployer contributing entities to the OPEB plan, including amounts paid for OPEB as the benefits come due, and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. Both (a) and (b) include amounts for payables to an OPEB plan. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.144 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶47, as amended by GASBS XX, ¶23]
.151 [Insert measurement focus and before basis of accounting.] [GASBS 75, ¶54, as amended by GASBS XX, fn10]
[In the second heading before paragraph .156, replace prepared using with presented applying.]
[In the heading before paragraph .186, replace prepared using with presented applying.]
[In the heading before paragraph .187, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.187 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, an employer’s proportionate share of the collective net OPEB liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due and the OPEB plan’s fiduciary net position is not sufficient for payment of those benefits. OPEB outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the employer (and, to the extent associated with the employer, by nonemployer contributing entities, if any) to the OPEB plan, including amounts paid for OPEB as the benefits come due, and (b) the change between the employer’s (and, to the extent associated with the employer, nonemployer contributing entities’, if any) beginning and ending balances of amounts due. OPEB outflows of short-term financial resources include amounts for payables to an OPEB plan. [GASBS 75, ¶88, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.188 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the portion of the following amount that is associated with the employer: the total of (a) amounts paid during the reporting period by nonemployer contributing entities to the OPEB plan, including amounts paid for OPEB as the benefits come due, and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. Both (a) and (b) include amounts for payables to an OPEB plan. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.189 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶89, as amended by GASBS XX, ¶23]
.195 [Insert measurement focus and before basis of accounting.] [GASBS 75, ¶95, as amended by GASBS XX, fn10]
[In the second heading before paragraph .199, replace prepared using with presented applying.]
.210 [Replace prepared using the current with presented applying the short-term and delete modified.] [GASBS 75, ¶108, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
[In the second heading before paragraph .211, replace prepared using with presented applying.]
.217 [Replace prepared using the current with presented applying the short-term and delete modified.] [GASBS 75, ¶115, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
[In the second heading before paragraph .218, replace prepared using with presented applying.]
[In the heading before paragraph .230, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.230 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a governmental nonemployer contributing entity’s proportionate share of the collective net OPEB liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due and the OPEB plan’s fiduciary net position is not sufficient for payment of those benefits. Outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the governmental nonemployer contributing entity to the OPEB plan, including amounts paid by the governmental nonemployer contributing entity for OPEB as the benefits come due, and (b) the change between the beginning and ending balances of amounts due. Outflows of short-term financial resources include amounts for payables to the OPEB plan. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 75, ¶126, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23]
.236 [Insert measurement focus and before basis of accounting.] [GASBS 75, ¶132, as amended by GASBS XX, fn10]
.242 [Revise the sources as follows:] GASBS 75, ¶138; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
.243 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶139, as amended by GASBS XX, ¶23]
.247 [Replace prepared using with presented applying.] [GASBS 75, ¶140, as amended by GASBS XX, fn10]
.248 [Revise the paragraph as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a payable to a defined benefit OPEB plan should be recognized to the extent that amounts are due pursuant to legal requirements, including contractual arrangements. Outflows of short-term financial resources for payables to a defined benefit OPEB plan should be recognized in accordance with paragraph .142, paragraph .187, paragraph .210, paragraph .217, or paragraph .230, as applicable. [GASBS 75, ¶141, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23]
.251 [Replace expenditures with outflows of short-term financial resources and replace normally expected to be liquidated with expendable available financial resources with due.] [GASBS 85, ¶21, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.252 [Revise as follows:] A payable should be recognized to the extent it is due (that is, for (a) the unpaid required contributions that are associated with pay periods within the reporting period and (b) the portion of any separate liabilities to the OPEB plan that is due pursuant to contractual arrangements or legal requirements). [GASBS 85, ¶22, as amended by GASBS XX, ¶12 and ¶20]
[In the heading before paragraph .601, replace Expenditures with Outflows of Short-Term Financial Resources; replace Current with Short-Term; and delete Modified.]
.601 [Replace current with short-term and delete modified.] [GASBTB 2004-2, ¶1, as amended by GASBS 75, ¶4, ¶6, and ¶141, GASBS 85, ¶19, and GASBS XX, ¶12]
[In Question 1, replace expenditure recognition with recognition of outflows of short-term financial resources.] [GASBTB 2004-2, ¶5, as amended by GASBS 75, ¶4, ¶6, and ¶140 and GASBS XX, ¶23]
[Revise Question 2 as follows:] How should the requirements of paragraph .248 of this section be applied to recognize governmental fund outflows of short-term financial resources and liabilities in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting for contributions to cost-sharing OPEB plans? [GASBTB 2004-2, ¶7, as amended by GASBS 75, ¶4, ¶6, and ¶141 and GASBS XX, ¶12 and ¶23]
[In the first paragraph of the response to Question 2, replace prepared on the modified accrual basis of accounting with presented applying the short-term financial resources measurement focus and accrual basis of accounting and replace expenditures with outflows of short-term financial resources.] [GASBTB 2004-2, ¶8, as amended by GASBS XX, ¶12 and ¶23]
[In the second paragraph of the response to Question 2, replace an OPEB expenditure with OPEB outflows of short-term financial resources.] [GASBTB 2004-2, ¶9, as amended by GASBS XX, ¶23]
.602 [In the response to Question 1, replace expenditures with outflows of short-term financial resources.] [GASBTB 2006-1, ¶3, as amended by GASBS 75, ¶21 and GASBS XX, ¶23; GASBS 75, ¶15, ¶30, and ¶73, as amended by GASBS XX, ¶23]
[In the response to Question 2, replace expenditures with outflows of short-term financial resources.] [GASBTB 2006-1, ¶7, as amended by GASBS 75, ¶4 and ¶6 and GASBS XX, ¶23]
.701-3 [Replace expenditure with outflows of short-term financial resources and replace revenue with revenue/inflows of short-term financial resources.] [GASBIG 2017-3, Q4.3, as amended by GASBS XX, ¶22 and ¶23]
.708-2 [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-3, Q4.54, as amended by GASBS XX, ¶11]
[In heading .709, replace prepared using with presented applying.]
.718-28 [Replace on the accrual basis of accounting with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.137, as amended by GASBS XX, fn10]
.718-31 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.139, as amended by GASBS XX, fn10]
.718-32 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.140, as amended by GASBS XX, fn10]
[In heading .719, replace prepared using with presented applying.]
[In heading .720, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.720-1 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.141, as amended by GASBS XX, ¶12 and ¶20]
.720-2 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.142, as amended by GASBS XX, ¶12 and ¶20]
.729-2 [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-3, Q4.171, as amended by GASBS XX, ¶11]
[In heading .730 replace prepared using with presented applying.]
.732-2 [Replace prepared using with presented applying.] [GASBIG 2017-3, Q4.188, as amended by GASBS XX, fn10]
.736-1 [Replace on the with applying the economic resources measurement focus and.] [GASBIG 2017-3, Q4.196, as amended by GASBS XX, fn10]
.736-3 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.197, as amended by GASBS XX, fn10]
.736-4 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.198, as amended by GASBS XX, fn10]
[In heading .748, replace prepared using with presented applying.]
[In heading .749, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.749-1 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.270, as amended by GASBS XX, ¶12 and ¶20]
.749-2 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.271, as amended by GASBS XX, ¶12 and ¶20]
[In heading .760, replace prepared using with presented applying.]
.766-1 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.297, as amended by GASBS XX, fn10]
.766-3 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.298, as amended by GASBS XX, fn10]
.766-4 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.299, as amended by GASBS XX, fn10]
[In heading .770, replace prepared using with presented applying.]
[In heading .776, replace prepared using with presented applying.]
.782-1 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.323, as amended by GASBS XX, fn10]
.782-2 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.324, as amended by GASBS XX, fn10]
.782-3 [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.325, as amended by GASBS XX, fn10]
[In heading .783, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.783-1 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.326, as amended by GASBS XX, ¶12 and ¶20]
.783-2 [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.327, as amended by GASBS XX, ¶12 and ¶20]
* * *
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS—REPORTING FOR BENEFITS PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED CONTRIBUTION SECTION P51
[In footnote 2, replace expenditures with outflows of short-term financial resources.] [GASBS 75, fn2, as amended by GASBS 85, ¶15 and GASBS XX, ¶23]
.106 [Revise the sources as follows:] GASBS 75, ¶20; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.107 [Replace prepared using with presented applying.] [GASBS 75, ¶230, as amended by GASBS XX, fn10]
.108 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, OPEB outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the employer (and by nonemployer contributing entities, if any) to the OPEB plan and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. [GASBS 75, ¶231, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.111 [Replace prepared using with presented applying.] [GASBS 75, ¶234, as amended by GASBS XX, fn10]
.112 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, the requirements in paragraph .108 should be applied. In addition, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by nonemployer contributing entities to the OPEB plan and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 75, ¶235, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.114 [Replace prepared using with presented applying.] [GASBS 75, ¶236, as amended by GASBS XX, fn10]
.115 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the governmental nonemployer contributing entity for OPEB as the benefits come due and (b) the change between the beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 75, ¶237, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.119 [Revise the sources as follows:] GASBS 75, ¶241; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.120 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶242, as amended by GASBS XX, ¶23]
* * *
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS—REPORTING FOR BENEFITS NOT PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED BENEFIT SECTION P52
.105 [Revise the sources as follows:] GASBS 75, ¶9; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
.109 [Revise the sources as follows:] GASBS 75, ¶19; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
.110 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶21 and ¶143, as amended by GASBS XX, ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17]
.112 [Revise the sources as follows:] GASBS 75, ¶145; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
[In second heading before paragraph .113, replace Prepared Using with Presented Applying.]
[In heading before paragraph .128, replace Prepared Using with Presented Applying.]
[In heading before paragraph .129, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
.129 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a total OPEB liability (or, if an employer has a special funding situation, a proportionate share of the collective total OPEB liability) should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due. OPEB outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the employer (and by nonemployer contributing entities, if any) for OPEB as the benefits come due and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of amounts due. OPEB outflows of short-term financial resources also should be recognized for costs incurred during the reporting period by the employer related to the administration of OPEB. [GASBS 75, ¶161, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.130 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by nonemployer contributing entities for OPEB as the benefits come due and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.131 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶162, as amended by GASBS XX, ¶23]
[In second heading before paragraph .141, replace Prepared Using with Presented Applying.]
[In heading before paragraph .155, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
.155 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, the government’s proportionate share of the collective total OPEB liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due. OPEB outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the government (and, to the extent associated with the government, by nonemployer contributing entities, if any) for OPEB as the benefits come due and (b) the change between the employer’s (and, to the extent associated with the government, nonemployer contributing entities’, if any) beginning and ending balances of amounts due. OPEB outflows of short-term financial resources also should be recognized for costs incurred during the reporting period by the government related to the administration of OPEB. [GASBS 75, ¶184, as amended by GASBS 85, ¶8, and GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.156 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of short-term financial resources should be recognized equal to the portion of the following amount that is associated with the government: the total of (a) amounts paid during the reporting period by nonemployer contributing entities for OPEB as the benefits come due and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.157 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶185, as amended by GASBS XX, ¶23]
[In second heading before paragraph .165, replace prepared using with presented applying.]
.176 [Replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBS 75, ¶202, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
[In second heading before paragraph .177, replace prepared using with presented applying.] [In heading before paragraph .188, replace prepared using with presented applying; replace current with short-term; and delete modified.]
.188 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a governmental nonemployer contributing entity’s proportionate share of the collective total OPEB liability should be recognized to the extent the liability measured as of the end of the reporting period is for benefit payments that are due. Outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid during the reporting period by the governmental nonemployer contributing entity for OPEB as the benefits come due and (b) the change between the beginning and ending balances of amounts due. Outflows of short-term financial resources also should be recognized for costs incurred during the reporting period by the governmental nonemployer contributing entity related to the administration of OPEB. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 75, ¶212, as amended by GASBS 85, ¶8 and GASBS XX, ¶12, ¶20, and ¶23]
.198 [Revise the sources as follows:] GASBS 75, ¶222; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23; GASBS 85, ¶17
.199 [Replace expenditures with outflows of short-term financial resources.] [GASBS 75, ¶223, as amended by GASBS XX, ¶23]
.203 [Replace prepared using with presented applying.] [GASBS 75, ¶227, as amended by GASBS XX, fn10]
.204 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, OPEB outflows of short-term financial resources related to insured benefits should be recognized equal to the total of (a) the amount of premiums paid or other payments made by the employer to the insurer and (b) the change between the beginning and ending balances of amounts for payments due pursuant to legal requirements, including contractual arrangements. [GASBS 75, ¶228, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.205 [Replace expenditure with outflows of short-term financial resources.] [GASBS 75, ¶229, as amended by GASBS XX, ¶23]
.601 [In response to Question 1, replace expenditures with outflows of short-term financial resources.] [GASBTB 2006-1, ¶3, as amended by GASBS 75, ¶21 and GASBS XX, ¶23; GASBS 75, ¶16 and ¶149]
[In heading .707, replace Prepared Using with Presented Applying.]
[In heading .715, replace Prepared Using with Presented Applying.]
[In heading .716, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
[Revise Question .716-1 as follows:]
.716-1
Q—If, at the end of the reporting period, benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph .101 of this section, should any portion of an employer’s total OPEB liability be recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting?
A—Yes. In circumstances in which benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph .101 of this section, the employer should recognize an amount equal to the amount of benefit payments due as an OPEB liability in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting.
[GASBIG 2017-3, Q4.410, as amended by GASBS XX, ¶12 and ¶20]
[In heading .726, replace Prepared Using with Presented Applying.]
[In heading .735, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
[Revise Question .735-1 as follows:]
.735-1
Q—If, at the end of the reporting period, benefit payments are due for OPEB provided to the employees of a primary government and its component units through the same OPEB plan that is not administered through a trust that meets the criteria in paragraph .101 of this section, should any portion of a government’s proportionate share of the collective total OPEB liability be recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting?
A—Yes. In circumstances in which benefit payments are due for OPEB provided to the employees of a primary government and its component units through the same OPEB plan that is not administered through a trust that meets the criteria in paragraph .101 of this section, a government should recognize an amount equal to its proportionate share of the amount of benefit payments due as an OPEB liability in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting.
[GASBIG 2017-3, Q4.440, as amended by GASBS XX, ¶12 and ¶20]
[In heading .744, replace prepared using with presented applying.]
[In heading .755, replace prepared using with presented applying.]
[In heading .762, replace prepared using with presented applying; replace current with short-term; and delete modified.]
[Revise Question .762-1 as follows:]
.762-1
Q—If, at the end of the reporting period, benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph .101 of this section, should any portion of a governmental nonemployer contributing entity’s proportionate share of the collective total OPEB liability be recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting?
A—Yes. In circumstances in which benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph .101 of this section, the governmental nonemployer contributing entity should recognize an amount equal to its proportionate share of the amount of benefit payments due as an OPEB liability in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting.
[GASBIG 2017-3, Q4.466, as amended by GASBS XX, ¶12 and ¶20]
* * *
POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS—REPORTING FOR BENEFITS NOT PROVIDED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED CONTRIBUTION SECTION P54
.106 [Revise the sources as follows:] GASBS 75, ¶20; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.107 [Replace prepared using with presented applying.] [GASBS 75, ¶230, as amended by GASBS XX, fn10]
.108 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, OPEB outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the employer (and by nonemployer contributing entities, if any) for OPEB as the benefits come due and (b) the change between the employer’s (and nonemployer contributing entities’, if any) beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. [GASBS 75, ¶231, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.111 [Replace prepared using with presented applying.] [GASBS 75, ¶234, as amended by GASBS XX, fn10]
.112 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, the requirements in paragraph .108 should be applied. In addition, inflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by nonemployer contributing entities for OPEB as the benefits come due and (b) the change between the nonemployer contributing entities’ beginning and ending balances of amounts due. [GASBS 75, ¶235, as amended by GASBS XX, ¶12; GASBS 85, ¶9, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23]
.114 [Replace prepared using with presented applying.] [GASBS 75, ¶236, as amended by GASBS XX, fn10]
.115 [Revise as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, outflows of short-term financial resources should be recognized equal to the total of (a) amounts paid by the governmental nonemployer contributing entity for OPEB as the benefits come due and (b) the change between the beginning and ending balances of contributions due pursuant to legal requirements, including contractual arrangements. Outflows of short-term financial resources should be classified in the same manner as the governmental nonemployer contributing entity classifies similar grants to other entities. [GASBS 75, ¶237, as amended by GASBS XX, ¶12, ¶20, and ¶23]
.119 [Revise the sources as follows:] GASBS 75, ¶241; GASBS 85, ¶10, as amended by GASBS XX, ¶12, ¶22, and ¶23
.120 [Replace expense/expenditures with expense/outflows of short-term financial resources.] [GASBS 75, ¶242, as amended by GASBS XX, ¶23]
* * *
PROPERTY TAXES SECTION P70
Sources: [Delete GASBI 5 and GASBS 38.]
[Revise the heading after paragraph .101 as follows; delete footnote 1 and renumber subsequent footnotes:]
Reporting Property Taxes Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
[Delete the heading immediately before paragraph .102.]
.102 [Revise as follows:] Section 1600, “Measurement Focus and Basis of Accounting,” provides that governmental fund inflows of short-term financial resources and outflows of short-term financial resources should be recognized applying the short-term financial resources measurement focus and accrual basis of accounting. Paragraph .110 of that section defines recognition of inflows of short-term financial resources in the following manner:
Inflows of short-term financial resources for a reporting period in governmental fund financial statements are recognized for (a) short-term transactions and other events as they occur and (b) long-term transactions and other events when payments are due except for long-term debt issued for short-term purposes, which is recognized as a short-term transaction.
[NCGAI 3, ¶3, as amended by GASBS XX, ¶12 and ¶22]
[Delete paragraph .103; renumber subsequent paragraphs.]
[Delete the second heading above renumbered paragraph .103 and revise the heading immediately before renumbered paragraph .103 as follows:] Recognition of Inflows of Short-Term Financial Resources
.103 [Revise as follows:] When a property tax assessment is made, it is to finance the budget of a particular period, and the inflows of short-term financial resources produced from any property tax assessment should be recognized in the fiscal period for which it was levied. [NCGAI 3, ¶6, as amended by GASBS XX, ¶12, ¶13, and ¶22]
.105 [Delete that are susceptible to accrual.] [NCGAS 1, ¶65, as amended by NCGAI 3, ¶6 and ¶7 and GASBS XX, ¶12, ¶13, and ¶22]
.106 [Revise as follows:] When property taxes receivable are recognized, or when property taxes are collected in advance of the period for which they are levied, they should be recorded as a deferred inflow of resources and recognized as inflows of short-term financial resources in the period for which they are levied. [NCGAI 3, ¶7, as amended by GASBS 33, ¶18 and GASBS XX, ¶22]
[Revise the heading before paragraph .108 as follows:] Reporting Property Tax (Imposed Nonexchange) Revenues Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting
.108 [Replace accrual basis with economic resources measurement focus and accrual basis of accounting.]
* * *
PROPRIETARY FUND ACCOUNTING AND FINANCIAL REPORTING SECTION P80
Sources: [Add GASBS XX.]
.102 [Replace the accrual basis with accrual basis.] [GASBS 1, ¶8; GASBS 34, ¶92, as amended by GASBS XX, fn10]
[Revise footnote 5 as follows:] Excluding amounts reported as unusual or infrequent items, defined in paragraph .144 of Section 2200. [GASBS 34, fn37, as amended by GASBS XX, ¶9]
.113 [Revise as follows:] The operating statement for proprietary funds is the statement of revenues, expenses, and changes in fund net position. Revenues should be reported by major source. This statement also should distinguish between operating and nonoperating revenues and expenses (as discussed in paragraph .115), as well as separately report noncapital subsidies (a type of nonoperating revenue and expense). Governments should present unusual or infrequent items individually as the last presented flow(s) of resources prior to the change in net resource flows in the proprietary funds statement of resource flows. [GASBS 34, ¶100, as amended by GASBS 48, ¶21, GASBS 63, ¶8, and GASBS XX, ¶29; GASBS XX, ¶10 and ¶29]
[Replace paragraphs .114–.115, including headings and footnote with new paragraphs .114– .116 as follows and renumber subsequent paragraphs and footnotes.]
.114 [GASBS XX, ¶30]
Definition of Operating Revenues and Expenses and Description of Nonoperating Revenues and Expenses
.115 [GASBS XX, ¶31]
Definition of subsidies
.116 [GASBS XX, ¶32]
[Revise the heading before paragraph .117 as follows:] Reporting Capital Contributions and Additions to Permanent and Term Endowments
.117 [Delete the second sentence.] [GASBS 34, ¶103, as amended by GASBS 63, ¶8 and GASBS XX, ¶30]
.704-3 [Replace expenditure levels with levels of outflows of short-term financial resources.] [GASBIG 2015-1, Q7.55.3, as amended by GASBS XX, ¶23]
.704-6 [Replace special revenue with special resources.] [GASBIG 2015-1, Q7.56.1, as amended by GASBS XX, ¶28]
.704-8 [Replace revenues, or expenses/expenditures with revenues/inflows of short-term financial resources, or expenses/outflows of short-term financial resources.] [GASBIG 2015-1, Q7.56.3, as amended by GASBS XX, ¶22 and ¶23]
[Revise Question .704-10 as follows:]
.704-10
Q—For determining major governmental funds, are inflows of resources and outflows of resources from noncurrent activities included in the calculations?
A—Yes. The major fund criteria are set forth in paragraph .106 of this section. Inflows of short-term financial resources include inflows of resources from noncurrent activities, and outflows of short-term financial resources include outflows of resources from noncurrent activities.
[GASBIG 2015-1, Q7.56.5, as amended by GASBS XX, ¶22, ¶23, and ¶27]
[Revise Question .704-11 as follows:]
.704-11
Q—Can the measurement focus and basis of accounting used for a government’s budget be used to determine major funds?
A—No. The measurement focus and basis of accounting used for a government’s budget might be useful in making an initial assessment, but ultimately, the major fund calculations should be done using GAAP bases of accounting. Governmental funds should be evaluated based on measurements applying the short-term financial resources measurement focus and accrual basis of accounting; enterprise funds should be tested using measurements applying the economic resources measurement focus and accrual basis of accounting.
[GASBIG 2015-1, Q7.56.6, as amended by GASBS XX, ¶12 and fn10]
.704-12 [Replace revenues, and expenditures with inflows of short-term financial resources, and outflows of short-term financial resources.] [GASBIG 2015-1, Q7.56.7, as amended by GASBS XX, ¶22 and ¶23]
.704-13 [Replace revenue and revenues with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q7.56.9, as amended by GASBS XX, ¶22]
[Revise Question .704-14 as follows:]
.704-14
Q—For determining major enterprise funds, should the analysis of revenues and expenses include nonoperating revenues and expenses and unusual or infrequent items?
A—Nonoperating revenues and expenses, although required to be reported separately from operating revenues and expenses, are indicators of the significance of the activities accounted for in individual funds and should be included in determining major enterprise funds. However, footnote 5 of this section specifically excludes unusual or infrequent items from the major fund determination.
[GASBIG 2015-1, Q7.56.10, as amended by GASBS XX, ¶9, ¶29, and ¶30]
.704-17 [Replace revenues, or expenditures/expenses with inflows of short-term financial resources/revenues, or outflows of short-term financial resources/expenses.] [GASBIG 2015-1, Q7.56.13, as amended by GASBS XX, ¶22 and ¶23]
.704-18 [Replace transaction with event; replace revenues, and expenditures/expenses with inflows of short-term financial resources/revenues, and outflows of short-term financial resources/expenses; and in the first sentence of the second paragraph of the answer, delete not and because they are reported as other financing sources (uses).] [GASBIG 2015-1, Q7.56.14, as amended by GASBS XX, ¶22, ¶23, and ¶30]
.705-1 [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting; replace cash, modified accrual, or budgetary basis of accounting with cash, budgetary, or other basis of accounting; and replace the accrual basis with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.57.1, as amended by GASBS XX, fn10]
.709-1 [Replace .113–.116 with .113–.117; update other cross-references for renumbering.] [GASBIG 2015-1, Q7.29.5, as amended by GASBS XX, ¶10 and ¶29–¶32]
.709-3 [Revise the sources as follows:] GASBIG 2015-1, Q7.72.4, as amended by GASBS XX, ¶30
[Delete Question .709-4; renumber subsequent questions.]
.709-4 [Insert meeting the definition of a subsidy after the first use of grant; replace as nonoperating revenue with in the noncapital subsidy classification; replace as a capital contribution with in the other nonoperating revenue classification.] [GASBIG 2015-1, Q7.72.8, as amended by GASBS XX, ¶30]
[Revise heading .710 as follows:]
.710 Definition of Operating Revenues and Expenses and Description of Nonoperating Revenues and Expenses
[Delete Question 710-1; renumber subsequent questions.]
.710-1 [In the question, replace operating with operating revenues, noncapital subsidies, and revise the answer as follows:] Appropriations meet the definition of a subsidy. Appropriations for noncapital-related purposes should be reported as noncapital subsidies. Appropriations for capital-related purposes should be reported as other nonoperating revenues and expenses. [GASBIG 2015-1, Q7.73.2, as amended by GASBS XX, ¶30–¶32]
.710-2 [Replace Footnote 7 of this section provides that with Consistent with paragraph
.115 of this section,.] [GASBIG 2015-1, Q7.73.3, as amended by GASBS XX, ¶31]
[Delete Question .710-4 and renumber subsequent question.]
[Insert new heading .711 and text as follows and renumber subsequent headings and questions.]
.711 Definition of subsidies
No questions assigned.
[Revise heading .712 as follows:]
.712 Reporting Capital Contributions and Additions to Permanent and Term Endowments
.712-3 [Replace a separate item after with other.] [GASBIG 2015-1, Q7.74.3, as amended by GASBS XX, ¶30 and ¶31]
.712-4 [In the first sentence of the answer, replace last section with other nonoperating revenues and expenses section and revise the third sentence of the answer as follows:] In either case, governmental funds would not report the event because capital assets are not recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting. [GASBIG 2015-1, Q7.74.4, as amended by GASBS XX, ¶12 and ¶30]
* * *
PUBLIC-PRIVATE AND PUBLIC-PUBLIC PARTNERSHIPS SECTION P90
[In the heading before paragraph .130, replace prepared using with presented applying; replace current with short-term; and add the following to the end:] and accrual basis of accounting.
.130 [Revise the paragraph as follows:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a transferor should recognize any payments received at or before the commencement of the PPP term as a deferred inflow of resources. A transferor subsequently should recognize the deferred inflow of resources as inflows of resources in a systematic and rational manner over the term of the PPP. [GASBS 94, ¶34, as amended by GASBS XX, ¶12, ¶22, and ¶24]
[In the heading before paragraph .151, replace prepared using with presented applying; replace current with short-term; and add the following to the end:] and accrual basis of accounting
.152 [Replace expenditure with outflow of short-term financial resources; replace other financing source with inflow of short-term financial resources; and replace long-term debt with general long-term debt.] [GASBS 94, ¶56, as amended by GASBS XX, ¶22 and ¶23]
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RESEARCH AND DEVELOPMENT ARRANGEMENTS SECTION R50
.107 [Replace expended with used.] [GASBS 62, ¶380, as amended by GASBS XX, fn10]
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SALES AND PLEDGES OF RECEIVABLES AND FUTURE REVENUES AND INTRA-ENTITY TRANSFERS OF ASSETS AND FUTURE REVENUES SECTION S20
.108 [Revise the third and fourth sentences as follows:] Proceeds received by the pledging government should be reported as a liability in its statements of net position and as inflows of resources from noncurrent activities in its governmental funds statement of short-term financial resource flows, if governmental funds receive the proceeds. Similarly, in its statement of net position a transferee government should recognize a receivable for the amounts paid to the pledging government. In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a receivable would be recognized only if the transaction is considered a short-term transaction. [GASBS 48, ¶11, as amended by GASBS 63, ¶8 and GASBS XX, ¶11, ¶12, ¶19, and ¶22]
.109 [Replace the fourth, fifth, and sixth sentences as follows:] Those payments also should be reported as outflows of resources from noncurrent activities for the payments to the transferee, rather than reductions of inflows of resources, in the pledging government’s governmental funds statement of short-term financial resource flows, if governmental funds are used to report the transaction. Payments received from the pledging government reduce the governmental transferee’s receivable in the transferee government’s statement of net position. Pledged receivables collected and paid to the transferee after the liability has been liquidated should be reported as outflows of short-term financial resources from current activities/expenses (by the pledging government) and inflows of short-term financial resources/revenues (by the governmental transferee) when the pledging government becomes obligated to make the payments. [GASBS 48, ¶12, as amended by GASBS 63, ¶8 and GASBS XX, ¶11, ¶12, ¶22, and ¶23]
.110 [Replace revenue with an inflow of short-term financial resources.] [GASBS 48, ¶13, as amended by GASBS 65, ¶31 and GASBS XX, ¶22]
.111 [Revise as follows:] In a sale of future revenues, the transferor government should report the proceeds as a deferred inflow of resources or revenue/inflow of short-term financial resources in both the government-wide and fund financial statements. Generally, revenues/inflows of short-term financial resources should be recognized over the duration of the sale agreement; however, there may be instances wherein recognition in the period of the sale is appropriate. For transactions with parties outside the financial reporting entity, reporting a deferred inflow of resources is required if the future revenue sold was not recognized previously because the event that would have resulted in revenues/inflows of short-term financial resources recognition had not yet occurred (for example, tobacco settlement revenues). Except as noted in the following sentence, consummation of the future revenue sale transaction is not a substitute for a revenue/inflow of short-term financial resources recognition event and, consequently, proceeds from the sale should be reported as a deferred inflow of resources. Revenues/inflows of short-term financial resources should be recognized at the time of the sale only if the revenue sold was not recognized previously because of uncertainty of realization or the inability to reliably measure the revenues/inflows of short-term financial resources. If the transferee is a government outside of the transferor government’s financial reporting entity, the transferee government should recognize the acquisition at cost and amortize the balance over the life of the transfer agreement. The transferee government, as owner of the future revenues, should recognize receivables and revenues/inflows of short-term financial resources when the recognition criteria appropriate to the specific type of revenue acquired are met. Recognition by transferors and transferees within the same financial reporting entity as the transferor is addressed in paragraph .112. [GASBS 48, ¶14, as amended by GASBS 65, ¶12 and GASBS XX, ¶22; GASBS 65, ¶12, as amended by GASBS XX, ¶22]
.113 [Replace a revenue or expenditure/expense with an inflow of short-term financial resources/revenue or an outflow of short-term financial resources/expense.] [GASBS 48, ¶15, as amended by GASBS 92, ¶6 and GASBS XX, ¶22 and ¶23; GASBS 92, ¶6]
.114 [Revise as follows:] In an intra-entity sale of future revenues, the transferor government has reported no carrying value for the rights sold because the asset recognition criteria have not been met. Therefore, the transferee government should not recognize an asset and related revenue/inflow of short-term financial resources until recognition criteria appropriate to that type of revenue are met. Instead, the transferee government should report the amount paid as a deferred outflow of resources to be recognized in expenses/outflows of short-term financial resources over the duration of the sale agreement. The transferor government should report the amount received from the intra-entity sale as a deferred inflow of resources in its government-wide and fund financial statements and recognize the amount as revenues/inflows of short-term financial resources over the duration of the sale agreement. [GASBS 48, ¶15, as amended by GASBS 65, ¶13 and GASBS XX, ¶22 and ¶23; GASBS 65, ¶13 as amended by GASBS XX, ¶22 and ¶23]
.115 [Replace revenue or expense/expenditure with revenue/inflows of short-term financial resources or expense/outflows of short-term financial resources; replace revenues recognized with revenues/inflows of short-term financial resources recognized; and replace future revenues sold with future revenues/inflows of short-term financial resources sold.] [GASBS 48, ¶16, as amended by GASBS 65, ¶31 and GASBS XX, ¶22 and ¶23]
[Replace paragraph .116 with new paragraphs .116–.118 as follows and renumber subsequent paragraphs.]
.116 Often, as part of the proceeds received, a transferor government acquires a subordinate or junior note or a residual certificate representing the right to collections that exceed a stipulated level—generally, the annual or total debt service requirements of the transferee. [GASBS 48, ¶17]
.117 In financial statements presented applying the economic resources measurement focus and accrual basis of accounting, a transferor government should recognize a note or residual certificate as an asset, representing a residual interest in:
  1. Excess receivable collections, giving consideration to the likelihood of realization. Residual interests recognized in the period in which the sale occurred should be treated as an adjustment of the gain or loss. Residual interests recognized in subsequent periods should be reported as revenues.
  2. Excess future revenues, when the asset recognition criteria appropriate to the specific type of revenue that underlies the note or certificate have been met. Revenue recognition of the residual interest also would occur at that time.
[GASBS 48, ¶17, as amended by GASBS XX, fn10]
.118 In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a transferor government should recognize an asset as discussed in paragraph .117 if the sale is classified as a short-term transaction or when excess receivable collections or excess future revenues are due if the sale is classified as a long-term transaction. A transferee government should recognize a liability for its obligation to remit residuals to the transferor government, based on the recognition criteria in paragraph .119 pertaining to recourse and other obligations. [GASBS 48, ¶17, as amended by GASBS XX, ¶12 and ¶19]
.119 [Replace A transferor government with In financial statements presented applying the economic resources measurement focus and accrual basis of accounting, a transferor government and insert the following at the end of the paragraph:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a transferor government should recognize liabilities arising from the purchase and sale agreement when incurred for short-term transactions and when payments are due for long-term transactions. [GASBS 48, ¶18, as amended by GASBS XX, ¶12]
.121 [Replace expenditure/expense with outflow of short-term financial resources/expense and replace should recognize revenue with should recognize an inflow of short-term financial resources/revenue.] [GASBS 48, ¶20, as amended by GASBS XX, ¶22 and ¶23]
.122 [Replace specific revenues with specific revenues/inflows of short-term financial resources and replace specific revenue with specific revenue/inflow of short-term financial resources. In subparagraph (c), replace revenue with revenue/inflow of short-term financial resources and in subparagraph (e), replace pledged revenues with pledged revenues/inflows of short-term financial resources.] [GASBS 48, ¶21, as amended by GASBS XX, ¶22]
.706-3 [Insert in the statement of net position and an inflow of short-term financial resources from noncurrent activities in governmental funds at the end of the first sentence of the answer. Replace expenditures with outflows of short-term financial resources from current activities; replace revenue with revenue/inflows of short-term financial resources from current activities; and replace expenditure with outflow of short-term financial resources from current activities.] [GASBIG 2015-1, QZ.48.13, as amended by GASBS XX, ¶22 and ¶23]
.708-5 [Replace other financing source with inflow of short-term financial resources.] [GASBIG 2015-1, QZ.48.15, as amended by GASBS XX, ¶27 and GASBIG 2016-1, ¶3]
.714-4 [Replace specific revenues with specific revenues/inflows of short-term financial resources.] [GASBIG 2015-1, QZ.48.14, as amended by GASBS XX, ¶22]
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SPECIAL ASSESSMENTS SECTION S40
.104 [Replace special revenue fund with special resources fund and replace general revenues with general inflows of short-term financial resources.] [GASBS 6, ¶4, as amended by GASBS 34, ¶80 and GASBS XX, ¶22 and ¶28]
.113 [Replace special revenue with special resources.] [GASBS 6, ¶13, as amended by GASBS 34, ¶6 and GASBS XX, ¶28]
.114 [In the first sentence, replace special revenue fund with special resources fund and revise the rest of the paragraph as follows:] Service-type special assessments that are exchange or exchange-like transactions and related outflows of short-term financial resources or expenses should be recognized applying the same measurement focus and basis of accounting as that normally applied for that fund type. Both the assessment inflows of short-term financial resources or revenues and the outflows of short-term financial resources or expenses for which the assessments were levied should be recognized applying the same measurement focus and basis of accounting as that normally applied for that fund type. In the government-wide financial statements, exchange or exchange-like service type special assessments should be reported as either governmental or business-type activities applying the economic resources measurement focus and accrual basis of accounting. Inflows of short-term financial resources or revenues from service-type special assessment transactions that are nonexchange transactions, as defined in Section N50, should be reported in accordance with the provisions of that section. [GASBS 6, ¶14, as amended by GASBS 33 and GASBS XX, ¶12, ¶22, ¶23, and ¶28; GASBS 34, ¶6, as amended by GASBS XX, ¶12 and fn10; GASBS 34, ¶15; GASBS 34, ¶16, as amended by GASBS XX, fn10]
.118 [Replace expenditures and expenditure with outflows of short-term financial resources; replace revenue with inflows of short-term financial resources; replace on the accrual basis of accounting with applying the short-term financial resources measurement focus and accrual basis of accounting; and revise the fifth sentence as follows:] At the time of the levy, if the special assessment arises from a short-term transaction, special assessments receivable and inflows of short-term financial resources should be recognized. If the special assessment arises from a long-term transaction, special assessments receivable and inflows of short-term financial resources should be recognized when payments are due. [GASBS 6, ¶15, as amended by GASBS 33, ¶12, ¶13, ¶17, and ¶18, and GASBS XX, ¶12, ¶19, ¶22, and ¶23; GASBS 34, ¶80 and ¶82, as amended by GASBS 63, ¶8]
.120 [Revise as follows:] If an improvement is initially financed with existing governmental fund resources rather than with debt, either a direct capital outflow of short-term financial resources or a transfer to a capital projects fund should be reported. At the time of the levy, if the special assessment arises from a short-term transaction, special assessments receivable and inflows of short-term financial resources should be recognized in the fund that provides the resources. If the special assessment arises from a long-term transaction, special assessments receivable and inflows of short-term financial resources should be recognized as payments are due. [GASBS 6, ¶22, as amended by GASBS XX, ¶12, ¶19, and ¶23]
.121 [In the first sentence, replace on the same basis of accounting with applying the same measurement focus and basis of accounting and in the last sentence, replace on the accrual basis with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 6, ¶15 and GASBS 34, ¶92, as amended by GASBS XX, fn10]
.124 [Replace on the accrual basis with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 6, ¶15; GASBS 34, ¶15; GASBS 34, ¶16, as amended by GASBS 63, ¶8 and GASBS XX, fn10]
.125 [Replace on the accrual basis with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 6, ¶19, as amended by GASBS 34, ¶16 and ¶50 and GASBS XX, fn10]
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SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS SECTION S80
[In the heading before paragraph .112, add the following at the end:] and Accrual Basis of Accounting
[In the heading before paragraph .155, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following at the end:] and Accrual Basis of Accounting
.156 [Revise as follows:] For SBITAs that are long-term transactions, an inflow of short-term financial resources and outflow of short-term financial resources and should be reported in the period the SBITA is initially recognized. The inflows of short-term financial resources and outflows of short-term financial resources and should be measured as provided in paragraphs .107–.109. Subsequent governmental fund subscription payments should be accounted for consistent with principles for debt service payments on general long-term debt. [GASBS 96, ¶59, as amended by GASBS XX, ¶22 and ¶23]
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TAX ABATEMENTS SECTION T10
.105 [In subparagraph (b), replace on an accrual basis with measured applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 77, ¶7, as amended by GASBS XX, fn10]
.106 [In subparagraph (b), replace on an accrual basis with measured applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 77, ¶8, as amended by GASBS XX, fn10]
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TERMINATION BENEFITS SECTION T25
[Revise the heading before paragraph .108 as follows:]
Recognition of Termination Benefit Liabilities and Expenses in Financial Statements Presented Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting
.108 [Replace prepared on the accrual basis of accounting with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 47, ¶12, as amended by GASBS XX, fn10; GASBS 69, ¶53]
.109 [Replace prepared on the accrual basis of accounting with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 47, ¶13, as amended by GASBS XX, fn10; GASBS 69, ¶53]
[Revise the heading before paragraph .112 as follows:]
Recognition of Termination Benefit Liabilities and Outflows of Short-Term Financial Resources in Financial Statements Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
.112 [Revise the paragraph as follows:] In governmental fund financial statements, which are presented applying the short-term financial resources measurement focus and accrual basis of accounting, liabilities and outflows of short-term financial resources for termination benefits that arise from long-term transactions should be recognized to the extent payments are due, as noted in paragraphs .108 and .111 of Section 1600. Liabilities and outflows of short-term financial resources for termination benefits that arise from short-term transactions should be recognized in accordance with paragraphs .108, .109, and .111 of Section 1600. Termination benefit outflows of short-term financial resources associated with the disposal of a government operation that are incurred in the period in which an operation is transferred or sold should be included in the determination of the amount reported as an unusual or infrequent item for the disposal of operations. [GASBS 47, ¶16, as amended by GASBS XX, ¶12, ¶20, and ¶23; GASBS 69, ¶54, as amended by GASBS XX, ¶9, ¶10, and ¶23]
[Revise headings .706 and .707 as follows:]
.706 Recognition of Termination Benefit Liabilities and Expenses in Financial Statements Presented Applying the Economic Resources Measurement Focus and Accrual Basis of Accounting
.707 Recognition of Termination Benefit Liabilities and Outflows of Short-Term Financial Resources in Financial Statements Presented Applying the Short-Term Financial Resources Measurement Focus and Accrual Basis of Accounting
* * *
TOBACCO SETTLEMENT RECOGNITION   SECTION T50
.107 [In the last paragraph of the response in paragraph .601, replace the last sentence with the following:] In financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, inflows of resources should be recognized to the extent that the event occurs. [GASBTB 2004-1, ¶15, as amended by GASBS XX, ¶12 and ¶22]
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BANKRUPTCIES     SECTION Bn5
Sources: [Add GASBS XX.]
.111 [Replace extraordinary with unusual or infrequent.] [GASBS 58, ¶12, as amended by GASBS XX, ¶9]
.112 [Replace expense or expenditure with expense/outflow of short-term financial resources.] [GASBS 58, ¶13, as amended by GASBS XX, ¶23]
.113 [Replace extraordinary with unusual or infrequent.] [GASBS 58, ¶14, as amended by GASBS XX, ¶9]
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CABLE TELEVISION SYSTEMS SECTION Ca5
Sources: [Add GASBS XX.]
.104 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4– ¶8, and ¶30–¶32; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; and GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.105 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.106 [Revise the sources as follows:] GASBS 34, ¶135, as amended by GASBS XX, ¶4– ¶11 and ¶30–¶33; GASBS XX, ¶4–¶11, ¶27, and ¶29–¶34
.107 [Replace special and extraordinary items, transfers with transfers, unusual or infrequent items.] [GASBS 34, ¶136, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
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COLLEGES AND UNIVERSITIES SECTION Co5
Sources: [Add GASBS XX.]
.103 [Replace paragraphs .106–.217 with paragraphs .106–.219.] [GASBS 34, ¶135, as amended by GASBS XX, ¶4–¶11 and ¶30–¶33; GASBS XX, ¶4–¶11, ¶27, and ¶29–¶34]
.104 [Replace special and extraordinary items, transfers with transfers, unusual or infrequent items.] [GASBS 34, ¶136, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
.106 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4– ¶8 and ¶30–¶32; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.107 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.110 [Replace special revenue fund with special resources fund.] [GASBS 14, ¶54, as amended by GASBS 34, ¶75, ¶80, and ¶82, GASBS 61, ¶9, and GASBS XX, ¶28; GASBS 34, ¶6]
.111 [Replace subparagraph (b) with the following:]
b. Condensed statement of revenues, expenses, and changes in net position:
(1) Operating revenues (by major source)
(2) Operating expenses—identifying depreciation (including any amortization) separately
(3) Operating income (loss)
(4) Noncapital subsidies (detailed)
(5) Operating income (loss) and noncapital subsidies
(6) Other nonoperating revenues and expenses (detailed)
(7) Unusual or infrequent items (detailed)
(8) Increase (decrease) in net position
(9) Net position—beginning of period
(10) Net position—end of period.
[GASBS 61, ¶9, as amended by GASBS 63, ¶7 and ¶8, GASBS 84, ¶14, GASBS 85, ¶4, and GASBS XX, ¶30]
.702-1 [Replace revenues and expenses or expenditures with inflows of short-term financial resources/revenues and outflows of short-term financial resources/expenses; replace nonoperating with inflows of short-term financial resources/; and add the following at the end of the answer:] Furthermore, recipient governments that report their activities in a proprietary fund would report Pell Grants as operating revenues. [GASBIG 2015-1, Q7.72.10, as amended by GASBS 84, ¶5 and GASBS XX, ¶22, ¶23, ¶31, and ¶32]
[Delete Question .702-3.]
.703-2 [Replace at a minimum by function with at a minimum by function or identifiable activity, as appropriate and replace paragraphs .106–.109 with paragraphs .106–.110.] [GASBIG 2015-1, Q7.72.5, as amended by GASBS XX, ¶4–¶8]
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COMBINATIONS AND DISPOSALS OF OPERATIONS SECTION Co10
.137 [Replace a special with an unusual or infrequent.] [GASBS 69, ¶40, as amended by GASBS XX, ¶9]
.139 [Replace expenditure with outflow of short-term financial resources.] [GASBS 69, ¶42, as amended by GASBS XX, ¶23]
.140 [Replace a special with an unusual or infrequent.] [GASBS 69, ¶43, as amended by GASBS XX, ¶9]
.142 [Replace a special with an unusual or infrequent and replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBS 69, ¶45, as amended by GASBS XX, ¶9 and ¶11]
.144 [Replace a special with an unusual or infrequent.] [GASBS 69, ¶47, as amended by GASBS XX, ¶9]
.147 [Replace a special with an unusual or infrequent and replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBS 69, ¶50, as amended by GASBS XX, ¶9 and ¶11]
.148 [Replace a special with an unusual or infrequent.] [GASBS 69, ¶51, as amended by GASBS XX, ¶9]
.151 [Replace a special with an unusual or infrequent; replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows; replace The special with The unusual or infrequent; and replace expenditures with outflows of resources.] [GASBS 69, ¶54, as amended by GASBS XX, ¶9, ¶11, and ¶23]
.155 [Replace revenues and expenditures with inflows of resources and outflows of resources.] [GASBS 69, ¶58, as amended by GASBS XX, ¶22 and ¶23]
* * *
HOSPITALS AND OTHER HEALTHCARE PROVIDERS SECTION Ho5
Sources: [Add GASBS XX.]
.104 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4– ¶8 and ¶30–¶32; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.105 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.106 [Revise the sources as follows:] GASBS 34, ¶135, as amended by GASBS XX, ¶4–¶11 and ¶30–¶33; GASBS XX, ¶4–¶11, ¶27, and ¶29–¶34
.107 [Replace special and extraordinary items, transfers with transfers, unusual or infrequent items.] [GASBS 34, ¶136, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
.111 [Replace special revenue fund with special resources fund.] [GASBS 14, ¶54, as amended by GASBS 34, ¶75, ¶80, and ¶82, GASBS 61, ¶9, and GASBS XX, ¶28; GASBS 34, ¶6]
.112 [Replace subparagraph (b) with the following:]
b. Condensed statement of revenues, expenses, and changes in net position:
(1) Operating revenues (by major source)
(2) Operating expenses—identifying depreciation (including any amortization) separately
(3) Operating income (loss)
(4) Noncapital subsidies (detailed)
(5) Operating income (loss) and noncapital subsidies
(6) Other nonoperating revenues and expenses (detailed)
(7) Unusual or infrequent items (detailed)
(8) Increase (decrease) in net position
(9) Net position—beginning of period
(10) Net position—end of period.
[GASBS 61, ¶9, as amended by GASBS 63, ¶7 and ¶8, GASBS 84, ¶14, GASBS 85, ¶4, and GASBS XX, ¶30]
* * *
INSURANCE ENTITIES—OTHER THAN PUBLIC ENTITY RISK POOLS SECTION In3
Sources: [Add GASBS XX.]
.104 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4– ¶8 and ¶30–¶32; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.105 [Replace paragraphs .106–.109 with paragraphs .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.106 [Revise the sources as follows:] GASBS 34, ¶135, as amended by GASBS XX, ¶4– ¶11 and ¶30–¶33; GASBS XX, ¶4–¶11, ¶27, and ¶29–¶34
.107 [Replace special and extraordinary items, transfers with transfers, unusual or infrequent items.] [GASBS 34, ¶136, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
* * *
INVESTMENT POOLS (EXTERNAL) SECTION In5
Sources: [Add GASBS XX.]
.103 [Replace prepared on with presented applying and delete the from the accrual basis.] [GASBS 31, ¶17, as amended by GASBS XX, fn10; GASBS 34, ¶139, as amended by GASBS 63, ¶8; GASBS 72, ¶80−¶82; GASBS 84, ¶20 and ¶23; GASBS XX, ¶4–¶8]
* * *
PENSION PLANS ADMINISTERED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA— DEFINED BENEFIT SECTION Pe5
.112 [Replace prepared on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 67, ¶14, as amended by GASBS XX, fn10]
.126 [In subparagraph b(3), replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 67, ¶30, as amended by GASBS XX, fn10]
.701-22 [Revise the sources as follows:] GASBIG 2015-1, Q5.64.3, as amended by GASBS 84, ¶14−¶20 and ¶22−¶25, GASBS XX, ¶4–¶8, GASBIG 2016-1, Q5.7, and GASBIG 20171, Q5.12
.706-8 [In answer replace accrual accounting with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.70.8, as amended by GASBS XX, fn10]
* * *
PUBLIC ENTITY RISK POOLS SECTION Po20
Sources: [Add GASBS XX.]
.114 [Replace paragraphs .106–.109 with paragraphs .106–.110 and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8 and ¶29–¶32; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.704-1 [In subparagraph (b) in the answer, replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.4.1, as amended by GASBS XX, ¶28]
.720-6 [Revise the sources as follows:] GASBIG 2015-1, Q3.27.5, as amended by GASBS XX, ¶4–¶8
.721-4 [Replace presented on an accrual basis with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q3.37.2, as amended by GASBS XX, fn10]
* * *
POSTEMPLOYMENT BENEFIT PLANS (OTHER THAN PENSION PLANS) ADMINISTERED THROUGH TRUSTS THAT MEET SPECIFIED CRITERIA—DEFINED BENEFIT SECTION Po50
.114 [Replace prepared using with presented applying.] [GASBS 74, ¶20, as amended by GASBS XX, fn10]
.128 [In subparagraph b(3), replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBS 74, ¶34, as amended by GASBS XX, fn10]
.701-16 [Revise the sources as follows:] GASBIG 2017-2, Q4.16, as amended by GASBS 84, ¶14−¶20 and ¶22−¶25, and GASBS XX, ¶4–¶8
* * *
REGULATED OPERATIONS SECTION Re10
Sources: [Add GASBS XX.]
.121 [Add GASBS XX, ¶9 as a source.]
.122 [Add GASBS XX, ¶9 as a source.]
.124 [Replace a special or extraordinary with an unusual or infrequent.] [GASBS 62, ¶498, as amended by GASBS 63, ¶8 and GASBS XX, ¶9; GASBS XX, ¶9]
[In footnote 10, add GASBS XX, ¶9 as a source.]
* * *
SPECIAL-PURPOSE GOVERNMENTS SECTION Sp20
Sources: [Add GASBS XX.]
.111 [Replace special and extraordinary items, transfers with transfers, unusual or infrequent items.] [GASBS 34, ¶136, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
.113 [Replace .106–.109 with .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 62, ¶3, ¶23−¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; GASBS XX, ¶4–¶8, ¶10, and ¶29– ¶32]
.114 [Replace .106–.109 with .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶30– ¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.115 [Replace .106–.109 with .106–.110 and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 84, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8]
.116 [Replace .106–.109 with .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶29– ¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.122 [Replace special revenue fund with special resources fund.] [GASBS 14, ¶54, as amended by GASBS 34, ¶75, ¶80, and ¶82, GASBS 61, ¶9, and GASBS XX, ¶28; GASBS 34, ¶6]
.123 [Replace subparagraph (b) with the following:]
b. Condensed statement of revenues, expenses, and changes in net position:
(1) Operating revenues (by major source)
(2) Operating expenses—identifying depreciation (including any amortization) separately
(3) Operating income (loss)
(4) Noncapital subsidies (detailed)
(5) Operating income (loss) and noncapital subsidies
(6) Other nonoperating revenues and expenses (detailed)
(7) Unusual or infrequent items (detailed)
(8) Increase (decrease) in net position
(9) Net position—beginning of period
(10) Net position—end of period.
[GASBS 61, ¶9, as amended by GASBS 63, ¶7 and ¶8, GASBS 84, ¶14, GASBS 85, ¶4, and GASBS XX, ¶30]
.706-2 [Replace paragraphs .170–.196 with paragraphs .172–.199 and update other cross-references for renumbering.] [GASBIG 2015-1, Q7.97.2, as amended by GASBS 84, ¶19 and GASBS XX, ¶10, and ¶29–¶32]
.707-1 [Revise the sources as follows:] GASBIG 2015-1, Q5.64.3, as amended by GASBS 84, ¶14−¶20 and ¶22−¶25, GASBS XX, ¶4–¶8, GASBIG 2016-1, Q5.7, and GASBIG 20171, Q5.12
* * *
UTILITIES SECTION Ut5
Sources: [Add GASBS XX.]
.104 [Replace .106–.109 with .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8 and ¶30–¶32; GASBS 62, ¶3, ¶23−¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19; GASBS XX, ¶4–¶8, ¶10, and ¶29– ¶32]
.105 [Replace .106–.109 with .106–.110; replace paragraphs .170–.196 with paragraphs .172–.199; and update other cross-references for renumbering.] [GASBS 34, ¶129; GASBS 34, ¶138, as amended by GASBS 63, ¶8, GASBS 84, ¶14, and GASBS XX, ¶4–¶8 and ¶30– ¶32; GASBS 34, ¶139, as amended by GASBS 63, ¶8 and GASBS XX, ¶4–¶8; GASBS 62, ¶3, ¶23–¶43, and ¶501; GASBS 63, ¶7; GASBS 84, ¶19, ¶20, ¶23, and ¶24; GASBS 84, ¶22 and ¶25, as amended by GASBS 92, ¶9; GASBS XX, ¶4–¶8, ¶10, and ¶29–¶32]
.106 [Revise the sources as follows:] GASBS 34, ¶135, as amended by GASBS XX, ¶4– ¶11 and ¶30–¶33; GASBS XX, ¶4–¶11, ¶27, and ¶29–¶34
.107 [Replace special and extraordinary items, transfers with transfers, unusual or infrequent items.] [GASBS 34, ¶136, as amended by GASBS 63, ¶8 and GASBS XX, ¶10]
.111 [Replace special revenue fund with special resources fund.] [GASBS 14, ¶54, as amended by GASBS 34, ¶75, ¶80, and ¶82, GASBS 61, ¶9, and GASBS XX, ¶28; GASBS 34, ¶6]
.112 [Replace subparagraph (b) with the following:]
b. Condensed statement of revenues, expenses, and changes in net position:
(1) Operating revenues (by major source)
(2) Operating expenses—identifying depreciation (including any amortization) separately
(3) Operating income (loss)
(4) Noncapital subsidies (detailed)
(5) Operating income (loss) and noncapital subsidies
(6) Other nonoperating revenues and expenses (detailed)
(7) Unusual or infrequent items (detailed)
(8) Increase (decrease) in net position
(9) Net position—beginning of period
(10) Net position—end of period.
[GASBS 61, ¶9, as amended by GASBS 63, ¶7 and ¶8, GASBS 84, ¶14, GASBS 85, ¶4, and GASBS XX, ¶30]
* * *
Comprehensive Implementation Guide— June 2024 Update
E2. The instructions that follow update the December 31, 2019 Comprehensive Implementation Guide, as amended by Statements No. 91, Conduit Debt Obligations, No. 92, Omnibus 2020, No. 93, Replacement of Interbank Offered Rates, No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, No. 96, Subscription-Based Information Technology Arrangements, and No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, and Implementation Guide No. 2020-1, Implementation Guidance Update—2020, for the provisions of this Statement.
* * *
[In all chapters, update cross-references.]
* * *
1.4.3. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q1.4.3, as amended by GASBS 93, ¶11 and GASBS XX, ¶28]
1.66.8. [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBIG 2015-1, Q1.66.8, as amended by GASBS XX, ¶22]
2.18.2. [Revise the answer as follows:] Yes. The operating activities category of the statement of cash flows includes the cash receipts and payments associated with the transactions and other events presented as operating revenues and expenses in the statement of revenues, expenses, and changes in fund net position. [GASBIG 2015-1, Q2.18.2, as amended by GASBS XX, ¶31]
2.20.1. [Revise the question and the first two sentences of the answer as follows:]
Q—How should rent income be presented in the statement of cash flows?
A—The basic question is whether rent income meets the classification criteria of the noncapital financing category, the capital and related financing category, or the investing activities category.
[GASBIG 2016-1, Q4.9, as amended by GASBS XX, ¶31]
2.20.5. [Revise the answer as follows:] Miscellaneous cash flows should be included in the operating activities category unless the cash flows specifically meet the definition of the noncapital financing, capital and related financing, or investing activities category. [GASBIG 2015-1, Q2.20.5, as amended by GASBS XX, ¶31]
[Delete Question 2.21.2.]
2.21.4. [Replace As discussed in Question 2.21.2, regardless with Regardless.] [GASBIG 2015-1, Q2.21.4, as amended by GASBS XX, ¶31]
3.4.1. [In subparagraph (b) in the answer, after paragraphs 29–32, as amended, insert and Statement No. XX, Financial Reporting Model Improvements, paragraph 28 and replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.4.1, as amended by GASBS XX, ¶28]
3.7.1. [Delete NCGA Statement 4, Accounting and Financial Reporting Principles for Claims and Judgments and Compensated Absences, as amended, and.] [GASBIG 2015-1, Q3.7.1, as amended by GASBS XX, ¶12]
3.27.5. [Replace Statement 34 with Statement 34 and Statement XX.] [GASBIG 2015-1, Q3.27.5, as amended by GASBS XX, ¶4–¶8]
3.37.2. [Replace presented on an accrual basis with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q3.37.2, as amended by GASBS XX, fn10]
3.49.1. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.49.1, as amended by GASBS 84, ¶5 and GASBS XX, ¶28]
3.49.3. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.49.3, as amended by GASBS XX, ¶28]
3.49.4. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q3.49.4, as amended by GASBS XX, ¶28]
3.54.1. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q3.54.1, as amended by GASBS XX, ¶23]
3.56.2. [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.56.2, as amended by GASBS XX, ¶23]
3.58.1. [Replace paragraph 14 of Interpretation No. 6, Recognition and Measurement of Certain Liabilities and Expenditures in Governmental Fund Financial Statements, as amended, with paragraph 20 of Statement XX.] [GASBIG 2015-1, Q3.58.1, as amended by GASBS 84, ¶21 and GASBS XX, ¶20]
3.65.2. [Replace current expenditures/expenses with outflows of short-term financial resources/expenses.] [GASBIG 2015-1, Q3.65.2, as amended by GASBS XX, ¶23]
3.68.1. [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.68.1, as amended by GASBS XX, ¶23]
3.72.2. [Replace expenditures/expenses with outflows of short-term financial resources/ expenses.] [GASBIG 2015-1, Q3.72.2, as amended by GASBS XX, ¶23]
4.28.4. [Revise the answer as follows:] A government that presents its component units in more than one column may segregate the component units using any method that it chooses. The provisions in paragraphs 44, 50, and 51 of Statement 14, as amended, and paragraph 33 of Statement XX regarding the mechanics of discrete presentation, are intended to provide guidance subject to the provisions related to presentation of major components units. Paragraph 33 of Statement XX requires governments to present major component units in separate columns in the government-wide statements if it does not reduce the readability of the statements. In addition, component units could be presented based on functional groupings, whether component units are governmental or business type, or whether the primary government is financially accountable based on fiscal dependency and a financial benefit or burden relationship. However, segregating component units into functional groupings in the government-wide statements does not relieve the government of the major component unit reporting responsibility in combining statements. [GASBIG 2015-1, Q4.28.4, as amended by GASBS XX, ¶33]
4.28.9. [Revise the answer as follows:] Paragraph 125 of Statement 34, as amended, requires component unit information to be displayed in the reporting entity’s government-wide statements. Paragraph 33 of Statement XX requires major component unit information to be presented in a separate column in the reporting entity’s statements of net position and activities if it does not reduce the readability of the statements. Presentation in combining statements is not applicable because the major component unit reporting requirements are met by discrete presentation in the government-wide statements. [GASBIG 2015-1, Q4.28.9, as amended by GASBS XX, ¶33]
[Delete Question 4.28.16.]
4.28.20. [Replace paragraph 126 of Statement 34, as amended, with paragraph 33 of Statement XX and add the following at the end of the first sentence in the question:] because it is not feasible to present each major component unit in a separate column in the reporting entity’s statements of net position and activities [GASBIG 2015-1, Q4.28.20, as amended by GASBS XX, ¶33]
[Delete Questions 4.28.21–4.28.23 and 4.28.25.]
4.30.3. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q4.30.3, as amended by GASBS 84, ¶26 and GASBS XX, ¶28]
4.30.5. [Replace external debt with external debt—a long-term transaction.] [GASBIG 2015-1, Q4.30.5, as amended by GASBS XX, ¶13 and GASBIG 2016-1, Q5.4]
4.30.6. [Replace Statement 54 limits with Statements 54 and XX limit; replace special revenue with special resources; and in the first sentence of the answer, replace Statement 54 does with Statements 54 and XX do.] [GASBIG 2015-1, Q4.30.6, as amended by GASBS XX, ¶28]
4.33.3. [Replace Statement 34, as amended with Statement 34, as amended, or Statement XX.] [GASBIG 2015-1, Q4.33.3, as amended by GASBS XX, ¶9, ¶10, and ¶29–¶32]
[In heading 4.34, replace Prepared Using with Presented Applying.]
4.36.1. [Replace as RSI or in the basic financial statements with in RSI; replace Paragraph 130 of Statement 34, as amended, clearly limits with Paragraph 130 of Statement 34, as amended, and paragraph 34 of Statement XX clearly limit; and replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q4.36.1, as amended by GASBS XX, ¶28 and ¶34]
4.38.4. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q4.38.4, as amended by GASBS XX, ¶28]
4.57.1. [Replace expenditures/expenses with outflows of short-term financial resources/ expenses and replace revenues with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q4.57.1, as amended by GASBS XX, ¶22 and ¶23]
4.57.2. [Replace expenditures/expenses with outflows of short-term financial resources/ expenses and replace revenues with inflows of short-term financial resources/revenues. Insert the following at the end of the first sentence of the answer:] applying the short-term financial resources measurement focus and accrual basis of accounting [GASBIG 2015-1, Q4.57.2, as amended by GASBS XX, ¶22 and ¶23]
5.64.3. [Replace and Statement 84 with, Statement 84, and Statement XX and replace paragraphs 139–141, as amended, with paragraphs 139–141 of Statement 34, as amended, and paragraphs 4–8 of Statement XX.] [GASBIG 2015-1, Q5.64.3, as amended by GASBS 84, ¶14−¶20 and ¶22−¶25, GASBS XX, ¶4–¶8, GASBIG 2016-1, Q5.7, and GASBIG 20171, Q5.12]
5.70.8. [In the answer, replace accrual accounting with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.70.8, as amended by GASBS XX, fn10]
5.116.3 [Replace expense with expenses/outflows of short-term financial resources and replace revenue with revenues/inflows of short-term financial resources.] [GASBIG 2015-1, Q5.116.3, as amended by GASBS 78, ¶2, GASBS 85, ¶9 and ¶10, and GASBS XX, ¶22 and ¶23]
[In heading 5.128, replace prepared using with presented applying.]
5.132.5. [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-1, Q4.11, as amended by GASBS XX, ¶11]
5.143.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.143.1, as amended by GASBS XX, fn10]
5.143.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.32, as amended by GASBS XX, fn10]
5.143.4. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.33, as amended by GASBS XX, fn10]
[In heading 5.144, replace prepared using with presented applying.]
[In heading 5.145, replace prepared using with presented applying; replace current with short-term; and delete modified.]
5.145.1. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.145.1, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.24]
5.145.2. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.145.2, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.25]
[In heading 5.160 replace prepared using with presented applying.]
5.164.5. [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-1, Q4.11, as amended by GASBS XX, ¶11]
5.165.2. [Replace prepared using with presented applying.] [GASBIG 2015-1, Q5.165.2, as amended by GASBS XX, fn10]
5.169.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.169.1, as amended by GASBS XX, fn10]
5.169.2. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.32, as amended by GASBS XX, fn10]
5.169.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.33, as amended by GASBS XX, fn10]
[In heading 5.184, replace prepared using with presented applying.]
[In heading 5.185, replace prepared using with presented applying; replace current with short-term; and delete modified.]
5.185.1. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.185.1, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.26]
5.185.2. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.185.2, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.27]
[In heading 5.198, replace Prepared Using with Presented Applying.]
5.204.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.204.1, as amended by GASBS XX, fn10]
[In heading 5.208, replace Prepared Using with Presented Applying.]
[In heading 5.214, replace Prepared Using with Presented Applying.]
5.223.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q5.223.1, as amended by GASBS XX, fn10]
5.223.2. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.32, as amended by GASBS XX, fn10]
5.223.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-1, Q4.33, as amended by GASBS XX, fn10]
[In heading 5.224, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
5.224.1. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.224.1, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.28]
5.224.2. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and delete modified.] [GASBIG 2015-1, Q5.224.2, as amended by GASBS 85, ¶8, GASBS XX, ¶12 and ¶20, and GASBIG 2017-1, Q5.29]
5.242.1. [Replace expense/expenditures with expense/outflows of short-term financial resources.] [GASBIG 2015-1, Q5.242.1, as amended by GASBS XX, ¶23]
[Revise Question 6.20.3 as follows:]
6.20.3.
Q—When investments in real estate are reported at fair value, what inflows of resources and outflows of resources are recognized?
A—All rental, lease, and other fees are recognized as inflows of short-term financial resources/revenue. In addition, fair value increases and decreases are recognized in inflows of short-term financial resources/revenue. No depreciation or amortization is recognized on the property. Investment outflows of short-term financial resources/expenses would include those arising from managing the property.
[GASBIG 2015-1, Q6.20.3, as amended by GASBS XX, ¶22]
6.24.1. [Replace revenue with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q6.24.1, as amended by GASBS XX, ¶22]
6.27.2. [Replace expenditure with outflow of short-term financial resources.] [GASBIG 2016-1, Q4.49, as amended by GASBS XX, ¶23]
[Revise Question 6.28.2 as follows:]
6.28.2.
Q—Can the change in fair value of investments in the statement of short-term financial resource flows of a governmental fund be reported as a noncurrent activity?
A—No. All activities in governmental funds except those related to the purchase and disposal of capital assets, the issuance and repayment of capital-related liabilities and long-term debt that is not long-term debt issued for short-term purposes, and unusual or infrequent items should be reported as current activities.
[GASBIG 2015-1, Q6.28.2, as amended by GASBS XX, ¶11 and ¶27]
6.28.6. [Replace revenue with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, Q6.28.6, as amended by GASBS XX, ¶22]
6.31.1. [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBIG 2015-1, Q6.31.1, as amended by GASBS XX, ¶22]
6.31.3. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q6.31.3, as amended by GASBS XX, ¶28]
7.4.2. [Replace financing sources and uses with certain inflows of short-term financial resources and outflows of short-term financial resources.] [GASBIG 2015-1, Q7.4.2, as amended by GASBS XX, ¶22 and ¶23]
7.4.4. [In the second bullet in the answer, delete the parentheses and delete or notes; in the first bullet in the answer, replace the second sentence with the following:] Governments meet the major component unit reporting requirements of Statement 14, as amended, by using multiple columns and rows in the government-wide financial statements or by including combining statements in the basic statements. [GASBIG 2015-1, Q7.4.4, as amended by GASBS XX, ¶33]
7.5.1. [Replace Paragraph 8 of Statement 34 with Paragraph 4 of Statement XX.] [GASBIG 2015-1, Q7.5.1, as amended by GASBS XX, ¶4]
7.5.2. [Replace Footnote 7 of Statement 34 with Footnote 3 of Statement XX and replace paragraph 11h of Statement 34, as amended, with paragraph 8e of Statement XX.] [GASBIG 2015-1, Q7.5.2, as amended by GASBS XX, ¶8 and fn3 and GASBIG 2016-1, Q5.10]
7.5.3. [Replace paragraph 10 of Statement 34 with paragraph 7 of Statement XX.] [GASBIG 2015-1, Q7.5.3, as amended by GASBS XX, ¶7]
7.5.6. [Replace paragraph 11 of Statement 34, as amended, and paragraph 11, as amended, with paragraph 8 of Statement XX.] [GASBIG 2015-1, Q7.5.6, as amended by GASBS XX, ¶8]
7.5.7. [Replace paragraph 11 of Statement 34, as amended, with paragraph 8 of Statement XX ; replace subparagraphs a–h and subparagraphs a–h, as amended with subparagraphs a–e; replace paragraph 11 and paragraph 11, as amended with paragraph 8; and replace paragraph 11h with paragraph 8e.] [GASBIG 2015-1, Q7.5.7, as amended by GASBS XX, ¶8]
[Delete Question 7.5.8.]
7.5.9. [Revise the question as follows; in the answer, replace paragraph 11a with paragraph 8a, replace expenditures with outlays, and replace readers with users.] Paragraph 8a of Statement XX requires MD&A to provide information about significant differences in the type of information the financial statements provide. How might governments meet this requirement? [GASBIG 2015-1, Q7.5.9, as amended by GASBS XX, ¶8 and ¶27]
7.5.10. [Replace paragraph 9 of Statement 34 with paragraph 5 of Statement XX; replace paragraph 11b with paragraph 8b; and in the penultimate sentence, replace Paragraph 9 with Paragraph 5.] [GASBIG 2015-1, Q7.5.10, as amended by GASBS XX, ¶5 and ¶8]
[Delete Question 7.5.11.]
7.5.12. [Replace paragraph 11f of Statement 34 with paragraph 8 d( 2) of Statement XX.] [GASBIG 2015-1, Q7.5.12, as amended by GASBS XX, ¶8]
7.5.13 [Replace paragraph 11h of Statement 34 with paragraph 8e of Statement XX; replace footnote 6 to paragraph 8 of Statement 34 with footnote 2 of Statement XX; and replace of the auditor’s report with the financial statements are issued.] [GASBIG 2015-1, Q7.5.13, as amended by GASBS XX, ¶8 and fn2]
7.5.14. [Replace Paragraph 11h of Statement 34, as amended, with Paragraph 8e of Statement XX; replace or results of operations with or that are expected to produce significant differences from current period results of operations; replace Paragraph 11c of Statement 34 with Paragraph 8c(1) of Statement XX; and replace paragraph 11h with paragraph 8e;.] [GASBIG 2015-1, Q7.5.14, as amended by GASBS XX, ¶8]
7.7.5. [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.7.5, as amended by GASBS XX, ¶11]
7.8.4. [Replace using the modified accrual basis of accounting with applying the short-term financial resources measurement focus and accrual basis of accounting and replace the accrual basis with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.8.4, as amended by GASBS XX, ¶12 and fn10]
[Delete Question 7.8.6.]
7.20.8. [Replace made significant expenditures with incurred significant outflows of resources.] [GASBIG 2015-1, Q7.20.8, as amended by GASBS XX, ¶27]
7.20.10. [Revise the answer as follows:] Actual expenses should be reported applying the economic resources measurement focus and accrual basis of accounting. The estimated amounts produced by the asset management system could be on a different basis. If estimated maintenance and preservation information is not determined applying the economic resources measurement focus and accrual basis of accounting, that basis may be disclosed in a note to RSI. [GASBIG 2015-1, Q7.20.10, as amended by GASBS XX, fn10]
7.22.2. [Replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q7.22.2, as amended by GASBS XX, ¶28]
7.23.2. [Replace balance sheet date with short-term financial resources balance sheet date.] [GASBIG 2015-1, Q7.23.2, as amended by GASBS XX, ¶11]
7.24.6. [Revise the second sentence of the question as follows:] (See paragraph 53 of Statement 34, as amended, and paragraph 103 of Statement 34, for example.) [GASBIG 2015-1, Q7.24.6, as amended by GASBS XX, ¶29 and ¶30]
7.26.1. [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.26.1, as amended by GASBS XX, ¶11]
7.28.1. [Replace city-wide vehicle maintenance expenditures with outflows of short-term financial resources for city-wide vehicle maintenance.] [GASBIG 2015-1, Q7.28.1, as amended by GASBS XX, ¶23]
7.28.5. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.28.5, as amended by GASBS XX, ¶23]
7.29.5. [Replace paragraphs 101–104 of Statement 34, as amended with paragraphs 100, 103, and 104 of Statement 34, as amended, and paragraphs 10 and 29–32 of Statement XX.] [GASBIG 2015-1, Q7.29.5, as amended by GASBS XX, ¶10 and ¶29–¶32]
7.33.4. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.33.4, as amended by GASBS XX, ¶23]
7.36.1. [Replace as RSI or in the basic financial statements with in RSI and replace special revenue funds with special resources funds.] [GASBIG 2015-1, Q4.36.1, as amended by GASBS XX, ¶28 and ¶34]
7.39.4. [Replace capital expenditures with capital outlays.] [GASBIG 2015-1, Q7.39.4, as amended by GASBS XX, ¶27]
7.42.1. [Replace revenue with an inflow of short-term financial resources.] [GASBIG 20151, Q7.42.1, as amended by GASBS XX, ¶22]
[Revise heading 7.43 as follows:]
7.43 Unusual or Infrequent Items
[Delete Questions 7.43.2 and 7.43.4.]
7.45.1. [Insert and paragraph 29 of Statement XX after Paragraph 100 of Statement 34, as amended, and replace special and extraordinary with unusual or infrequent.] [GASBIG 2015-1, Q7.45.1, as amended by GASBS XX, ¶9 and ¶29]
7.47.4. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.4, as amended by GASBS XX, ¶23]
7.47.5. [In the question, replace federal reimbursement with federal payment, replace expenditures with costs, and delete ,or revenue and expense; in the answer, replace revenue or expense from the grant with inflows of short-term financial resources/revenues or outflows of short-term financial resources/expenses from the grant; and in the last sentence, replace revenue with inflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.5, as amended by GASBS XX, ¶22 and ¶23]
7.47.11. [Replace revenues with inflows of short-term financial resources or revenues and replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q7.47.11, as amended by GASBS XX, ¶22 and ¶23]
7.47.22. [Revise the answer as follows:] The amount would be reported in the same fashion as other sales to outsiders—that is, as a direct expense or as a general revenue—or if “unusual or infrequent,” as an unusual or infrequent item. [GASBIG 2015-1, Q7.47.22, as amended by GASBS XX, ¶9 and ¶10]
7.49.1. [Replace expenditures with outflows of resources and replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.49.1, as amended by GASBS XX, ¶27 and ¶28]
7.52.2. [Replace expenditures with outflows of resources and replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.2, as amended by GASBS 84, ¶11 and GASBS XX, ¶27 and ¶28]
7.52.5. [Replace revenue sharing with resource sharing; replace royalty revenue with royalties; and replace special revenue fund with special resources fund.] [GASBIG 20151, Q7.52.5, as amended by GASBS 84, ¶14 and GASBS XX, ¶27 and ¶28]
7.52.6. [Replace Statement 54, as amended, with Statement 54, as amended, and Statement XX, and replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.52.6, as amended by GASBS 84, ¶11 and ¶17 and GASBS XX, ¶28]
7.52.7. [In the answer, insert the following at the end of the third sentence:] for claims arising from short-term transactions in the governmental fund or corresponding liability in the proprietary fund [GASBIG 2015-1, Q7.52.7, as amended by GASBS 84, ¶17 and ¶18, GASBS XX, ¶12 and ¶20, and GASBIG 2019-2, Q5.2]
7.52.8. [Revise answer as follows:] Escheat property may include amounts that (a) will be paid to heirs or beneficiaries, (b) are temporarily held for other governments, or (c) will revert to the government itself, in the absence of rightful heirs or claimants. A governmental or proprietary fund may be used to account for the entire amount (a, b, and c), with associated liabilities. In a governmental fund, the associated liabilities are for the amounts arising from short-term transactions that will be paid to claimants or other governments. In a proprietary fund, the associated liabilities are the amounts that will be paid to claimants or other governments. Alternatively, a governmental or proprietary fund may be used to account for only the amount that is expected to revert to the government, with the amounts held for claimants and amounts held for other governments accounted for in one or more fiduciary funds, as appropriate. [GASBIG 2015-1, Q7.52.8, as amended by GASBS 84, ¶14 and GASBS XX, ¶12 and ¶20]
7.55.3. [Replace expenditure levels with levels of outflows of short-term financial resources.] [GASBIG 2015-1, Q7.55.3, as amended by GASBS XX, ¶23]
7.56.1. [Replace special revenue with special resources.] [GASBIG 2015-1, Q7.56.1, as amended by GASBS XX, ¶28]
7.56.3. [Replace revenues, or expenses/expenditures with revenues/inflows of short-term financial resources, or expenses/outflows of short-term financial resources.] [GASBIG 2015-1, Q7.56.3, as amended by GASBS XX, ¶22 and ¶23]
[Revise Questions 7.56.5 and 7.56.6 as follows:]
7.56.5.
Q—For determining major governmental funds, are inflows of resources and outflows of resources from noncurrent activities included in the calculations?
A—Yes. The major fund criteria are set forth in paragraph 76 of Statement 34, as amended. Inflows of short-term financial resources include inflows of resources from noncurrent activities, and outflows of short-term financial resources include outflows of resources from noncurrent activities.
[GASBIG 2015-1, Q7.56.5, as amended by GASBS XX, ¶22, ¶23, and ¶27]
7.56.6.
Q—Can the measurement focus and basis of accounting used for a government’s budget be used to determine major funds?
A—No. The measurement focus and basis of accounting used for a government’s budget might be useful in making an initial assessment, but ultimately, the major fund calculations should be done using GAAP bases of accounting. Governmental funds should be evaluated based on measurements applying the short-term financial resources measurement focus and accrual basis of accounting; enterprise funds should be tested using measurements applying the economic resources measurement focus and accrual basis of accounting.
[GASBIG 2015-1, Q7.56.6, as amended by GASBS XX, ¶12 and fn10]
7.56.7. [Replace revenues, and expenditures with inflows of short-term financial resources, and outflows of short-term financial resources.] [GASBIG 2015-1, Q7.56.7, as amended by GASBS XX, ¶22 and ¶23]
7.56.8. [In the question and in the table in the answer, replace special revenue with special resources.] [GASBIG 2015-1, Q7.56.8, as amended by GASBS XX, ¶28]
7.56.9. [Replace revenue and revenues with inflows of short-term financial resources/ revenues.] [GASBIG 2015-1, Q7.56.9, as amended by GASBS XX, ¶22]
[Revise Question 7.56.10 as follows:]
7.56.10.
Q—For determining major enterprise funds, should the analysis of revenues and expenses include nonoperating revenues and expenses and unusual or infrequent items?
A—Nonoperating revenues and expenses, although required to be reported separately from operating revenues and expenses, are indicators of the significance of the activities accounted for in individual funds and should be included in determining major enterprise funds. However, footnote 37 of Statement 34, as amended, specifically excludes unusual or infrequent items from the major fund determination.
[GASBIG 2015-1, Q7.56.10, as amended by GASBS XX, ¶9, ¶29, and ¶30]
7.56.13. [Replace revenues, or expenditures/expenses with inflows of short-term financial resources/revenues, or outflows of short-term financial resources/expenses.] [GASBIG 2015-1, Q7.56.13, as amended by GASBS XX, ¶22 and ¶23]
7.56.14. [Replace transaction with event; replace revenues, and expenditures/expenses with inflows of short-term financial resources/revenues, and outflows of short-term financial resources/expenses; and in the first sentence of the second paragraph of the answer, delete not and because they are reported as other financing sources (uses).] [GASBIG 2015-1, Q7.56.14, as amended by GASBS XX, ¶22, ¶23, and ¶30]
7.57.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting; replace cash, modified accrual, or budgetary basis of accounting with cash, budgetary, or other basis of accounting; and replace the accrual basis with the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.57.1, as amended by GASBS XX, fn10]
7.59.2. [Replace under the modified accrual basis of accounting with presented applying the short-term financial resources measurement focus and accrual basis of accounting.] [GASBIG 2015-1, Q7.59.2, as amended by GASBS XX, ¶12]
[Revise heading 7.62 as follows:]
7.62 Short-Term Financial Resources Balance Sheet
[Revise Question 7.62.1 as follows:]
7.62.1.
Q—For governmental funds, should long-term receivables be recognized on the short-term financial resources balance sheet?
A—Generally, no. Long-term receivables are items that arise from a long-term transaction and are recognized when payments become due. Payments due in future periods would not be recognized until those future periods. If a payment became due in the current period and was unpaid at period-end, it should be reported as an asset, subject to considerations regarding collectability.
[GASBIG 2015-1, Q7.62.1, as amended by GASBS XX, ¶12 and ¶19]
7.62.3. [Replace under the current financial resources measurement focus and the modified accrual basis of accounting with applying the short-term financial resources measurement focus and accrual basis of accounting; replace balance sheet with short-term financial resources balance sheet; replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows; and delete revenue or expenditure. Insert the following at the end of the fourth sentence of the answer:] applying the short-term financial resources measurement focus and accrual basis of accounting [GASBIG 2015-1, Q7.62.3, as amended by GASBS XX, ¶11, ¶12, ¶22, and ¶23]
[Revise heading 7.64 as follows:]
7.64 Statement of Short-Term Financial Resource Flows
[Revise Question 7.64.1. as follows:]
7.64.1.
Q—In the statement of short-term financial resource flows, can a government report inflows of resources from noncurrent activities with outflows of resources from current activities and outflows of resources from noncurrent activities with outflows of resources from current activities?
A—No. The presentation of the statement of short-term financial resource flows is limited to one format; therefore, net flows from noncurrent activities should be reported after net flows from current activities, as presented in paragraph 86 of Statement 34, as amended, and paragraph 27 of Statement XX.
[GASBIG 2015-1, Q7.64.1, as amended by GASBS XX, ¶11 and ¶27]
[Revise headings 7.65 and 7.66 as follows:]
7.65 Classification of inflows of resources and outflows of resources
7.66 Noncurrent activities
[Revise Question 7.66.1 as follows:]
7.66.1.
Q—Can debt proceeds—that is, the face amount of the debt net of premiums, discounts, and issuance costs—be reported as inflows of resources from noncurrent activities?
A—No. Paragraph 88 of Statement 34, as amended, requires the face amount of long-term debt, rather than the proceeds, to be reported as an inflow of resources from noncurrent activities. That paragraph also includes issuance premium or discount among the items that should be reported as inflows or outflows of resources from noncurrent activities. Debt issue costs paid out of debt proceeds, such as underwriter fees, should be reported as outflows of resources from current activities.
[GASBIG 2015-1, Q7.66.1, as amended by GASBS XX, ¶27]
[Revise heading 7.67 as follows:]
7.67 Unusual or infrequent items
[Revise Questions 7.67.1 and 7.67.2 as follows:]
7.67.1. [Replace special and extraordinary and extraordinary and special with unusual or infrequent.] [GASBIG 2015-1, Q7.67.1, as amended by GASBS XX, ¶9 and ¶10]
7.67.2. [In the question, replace a special or extraordinary with an unusual or infrequent; revise the answer as follows:] Yes. For example, assume that a government sold a significant governmental capital asset for a large amount, but at a negligible gain or loss. Significant proceeds from the sale would be reported in the governmental fund financial statements; however, because the gain or loss is insignificant, it would not be reported as an unusual or infrequent item in the statement of activities. On the other hand, the reverse situation—a transaction is an unusual or infrequent item in the statement of activities but not in the fund financial statements—also could occur. For example, a local government assumes the debt of another organization, either because it is required to as a guarantor, or because it chooses to under a “moral” obligation. Because this debt arises from a long-term transaction, the debt would be recognized as payments become due. There is no unusual or infrequent item required to be reported in the statement of short-term financial resource flows. In the statement of activities, however, the event results in a change in net position and would be reported. [GASBIG 2015-1, Q7.67.2, as amended by GASBS XX, ¶9, ¶11, and ¶23]
7.72.4. [Replace Paragraph 101 of Statement 34, as amended, with Paragraph 30 of Statement XX.] [GASBIG 2015-1, Q7.72.4, as amended by GASBS XX, ¶30]
7.72.5. [Replace paragraph 11b(7) of Statement 34 with paragraph 8b(9) of Statement XX; replace at a minimum by function with at a minimum by function or identifiable activity, as appropriate; and replace paragraph 138a of Statement 34, as amended, indicates that paragraph 8–11, as amended, with paragraph 138a of Statement 34, as amended, indicates that paragraphs 4–8 of Statement XX.] [GASBIG 2015-1, Q7.72.5, as amended by GASBS XX, ¶4–¶8]
[Delete Question 7.72.6.]
7.72.8. [Insert meeting the definition of a subsidy after the first use of grant; replace as nonoperating revenue with in the noncapital subsidy classification; replace as a capital contribution with in the other nonoperating revenue classification; and replace paragraph 101 of Statement 34, as amended, with paragraph 30 of Statement XX.] [GASBIG 2015-1, Q7.72.8, as amended by GASBS XX, ¶30]
7.72.9. [Replace should not report the transaction as an operating expense with should report the transaction as an other nonoperating expense.] [GASBIG 2015-1, Q7.72.9, as amended by GASBS XX, ¶30]
7.72.10. [Replace revenues and expenses or expenditures with inflows of short-term financial resources/revenues and outflows of short-term financial resources/expenses; replace nonoperating with inflows of short-term financial resources/; and add the following at the end of the answer:] Furthermore, recipient governments that report their activities in a proprietary fund would report Pell Grants as operating revenues. [GASBIG 2015-1, Q7.72.10, as amended by GASBS 84, ¶5 and GASBS XX, ¶22, ¶23, ¶31, and ¶32]
[Revise heading 7.73 as follows:]
7.73 Definition of operating revenues and expenses and description of nonoperating revenues and expenses
[Delete Question 7.73.1.]
7.73.2. [In the question, replace operating with operating revenues, noncapital subsidies, and revise the answer as follows:] Appropriations meet the definition of a subsidy. Appropriations for noncapital-related purposes should be reported as noncapital subsidies. Appropriations for capital-related purposes should be reported as other nonoperating revenues and expenses. [GASBIG 2015-1, Q7.73.2, as amended by GASBS XX, ¶30–¶32]
7.73.3. [Replace Footnote 42 of Statement 34 provides that with Consistent with paragraph
31 of Statement XX.] [GASBIG 2015-1, Q7.73.3, as amended by GASBS XX, ¶31]
[Delete Question 7.73.4.]
7.74.3. [Replace a separate item after with other.] [GASBIG 2015-1, Q7.74.3, as amended by GASBS XX, ¶30 and ¶31]
7.74.4. [In the first sentence of the answer, replace last section with other nonoperating revenue and expenses section and revise the third sentence of the answer as follows:] In either case, governmental funds would not report the event because capital assets are not recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting. [GASBIG 2015-1, Q7.74.4, as amended by GASBS XX, ¶12 and ¶30]
7.82.2. [Replace revenues and expenditures with inflows of short-term financial resources/revenues and outflows of short-term financial resources/expenses.] [GASBIG 2015-1, Q7.82.2, as amended by GASBS XX, ¶22 and ¶23]
7.82.3. [Replace a revenue with an inflow of short-term financial resources.] [GASBIG 2015-1, Q7.82.3, as amended by GASBS XX, ¶22]
7.84.1. [Replace paragraph 11a of that Statement and paragraph 11a with paragraph 8a of Statement XX and replace a brief discussion of with an overview of.] [GASBIG 2015-1, Q7.84.1, as amended by GASBS 84, ¶5 and GASBS XX, ¶8]
7.91.1. [Replace special revenue funds with special resources funds and replace disclosure with presentation.] [GASBIG 2015-1, Q7.91.1, as amended by GASBS XX, ¶28 and ¶34]
7.91.2. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, Q7.91.2, as amended by GASBS XX, ¶28]
7.91.3. [Replace special revenue funds with special resources funds; in the question, replace Statement 34, as amended, with Statement 34, as amended, and paragraph 34 of Statement XX; and in the answer, replace Statement 34, as amended, with Statement 34, as amended, and Statement XX.] [GASBIG 2015-1, Q7.91.3, as amended by GASBS XX, ¶28 and ¶34]
7.91.4. [Replace special revenue with special resources and delete the last sentence of the answer.] [GASBIG 2015-1, Q7.91.4, as amended by GASBS XX, ¶28 and ¶34]
7.91.5. [Delete the first sentence of the question; replace special revenue with special resources; replace that schedule with the budgetary comparison schedule; and replace Paragraph 130 of Statement 34, as amended, sets with Paragraph 130 of Statement 34, as amended, and paragraph 34 of Statement XX set.] [GASBIG 2015-1, Q7.91.5, as amended by GASBS XX, ¶28 and ¶34]
7.91.6. [Delete the first sentence of the question; replace Paragraph 130 of Statement 34, as amended, clearly limits with Paragraph 130 of Statement 34, as amended, and paragraph 34 of Statement XX, clearly limits; replace special revenue with special resources; and replace that schedule with the budgetary comparison schedule.] [GASBIG 2015-1, Q7.91.6, as amended by GASBS XX, ¶28 and ¶34]
[Delete Questions 7.91.7 and 7.91.8.]
7.91.9. [Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q7.91.9, as amended by GASBS XX, ¶11 and ¶27]
7.91.10. [Replace requirement in paragraph 130 of Statement 34, as amended, with requirements in paragraph 130 of Statement 34, as amended, and paragraph 34 of Statement XX.] [GASBIG 2015-1, Q7.91.10, as amended by GASBS XX, ¶34]
[Revise Question 7.91.11 as follows:]
7.91.11.
Q—Budgeted inflows of resources forecasts are provided by a state’s legislative budget office for use in determining budgetary outflows of resources levels for all legislatively appropriated funds. Those estimated budgetary inflows of resources, however, are not contained in the appropriations bill and thus are not “legally adopted.” Should the state report those budgetary inflows of resources estimates as budgeted inflows of resources in the budget-to-actual comparison?
A—Yes. The estimated budgetary inflows of resources should be included in the budgetary comparison as budgeted inflows of resources. Paragraph 130 of Statement 34 and paragraph 34 of Statement XX require that actual results be compared with amounts in the “appropriated budget.” Paragraph 11 of NCGA Interpretation 10, as amended, which is referenced in footnote 55 of Statement 34, as amended, states that the appropriated budget is defined as “the budgetary outflows of resources authority created by the appropriation bills or ordinances which are signed into law and related estimated budgetary inflows of resources.” The reference to estimated budgetary inflows of resources after the mention of the legal adoption of the appropriations bill implies that the budgetary inflows of resources estimates need not be “legally adopted.”
[GASBIG 2015-1, Q7.91.11, as amended by GASBS XX, ¶27 and ¶34]
[Delete Question 7.91.12.]
7.91.13. [Replace paragraph 130 of Statement 34, as amended, states with Paragraph 130 of Statement 34, as amended, and paragraph 34 of Statement XX state; replace special revenue with special resources; and delete in the basic statements or as RSI.] [GASBIG 2015-1, Q7.91.13, as amended by GASBS XX, ¶28 and ¶34]
7.91.14. [Replace Paragraph 130 of Statement 34, as amended, with paragraph 130 of Statement 34, as amended, and paragraph 34 of Statement XX, and revise the sources as follows:] [GASBIG 2015-1, Q7.91.14, as amended by GASBS XX, ¶34]
[Revise Question 7.93.1 as follows:]
7.93.1.
Q—Statement 34, paragraph 131, as amended, requires disclosure in notes to RSI of excesses of budgetary outflows of resources over appropriations in the general fund and each major special resources fund that has a legally adopted annual budget. Is disclosure in notes to RSI required for similar excesses in other governmental funds?
A—No. However, NCGA Interpretation 6, paragraph 4, as amended, requires disclosure in of significant violations of finance-related legal and contractual provisions in notes to the basic financial statements. Therefore, disclosure in notes to the basic financial statements of the excess of budgetary outflows of resources over appropriations is required for any fund, including nonmajor special resources funds, capital projects funds, or debt service funds, if the overage constitutes a significant violation of finance-related legal and contractual provisions. In addition, Statement 38, paragraph 9, requires governments to disclose in notes to financial statements actions taken to address such violations.
[GASBIG 2015-1, Q7.93.1, as amended by GASBS XX, ¶27, ¶28, and ¶34]
[Revise Question 7.93.2 as follows:]
7.93.2.
Q—Should material violations of budgetary spending limitations (excess of budgetary outflows of resources over appropriations) be disclosed in notes to RSI?
A—Paragraph 131 of Statement 34, as amended, states that notes to RSI should disclose excesses of budgetary outflows of resources over appropriations in individual funds presented in the budgetary comparison. In addition, if the excess is considered to be a significant violation of finance-related legal provisions, a disclosure in the notes to the basic financial statements is required. (See also Question 7.93.1.)
[GASBIG 2015-1, Q7.93.2, as amended by GASBS XX, ¶27 and ¶34]
7.97.2. [Replace and paragraph 19 of Statement 84 with paragraph 19 of Statement 84, and paragraphs 10 and 29–32 of Statement XX.] [GASBIG 2015-1, Q7.97.2, as amended by GASBS 84, ¶19 and GASBS XX, ¶10 and ¶29–¶32]
7.107.6. [Replace expenditures with outflows of resources.] [GASBIG 2015-1, Q7.107.6, as amended by GASBS XX, ¶27]
8.97.2 [Replace and Statement 84 with , Statement 84, and Statement XX and replace paragraphs 139–141, as amended, with paragraphs 139–141 of Statement 34, as amended, and paragraphs 4–8 of Statement XX.] [GASBIG 2017-2, Q4.16, as amended by GASBS 84, ¶14−¶20 and ¶22−¶25, and GASBS XX, ¶4–¶8]
8.177.3. [Replace expenditure with outflow of short-term financial resources and replace revenue with revenue/inflow of short-term financial resources.] [GASBIG 2017-3, Q4.3, as amended by GASBS XX, ¶22 and ¶23]
8.197.2. [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-3, Q4.54, as amended by GASBS XX, ¶11]
[In heading 8.198, replace Prepared Using with Presented Applying.]
8.219.1. [Replace on the accrual basis of accounting with presented applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.137, as amended by GASBS XX, fn10]
8.219.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.139, as amended by GASBS XX, fn10]
8.219.4. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.140, as amended by GASBS XX, fn10]
[In heading 8.220, replace Prepared Using with Presented Applying.]
[In heading 8.221, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
8.221.1. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.141, as amended by GASBS XX, ¶12 and ¶20]
8.221.2. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.142, as amended by GASBS XX, ¶12 and ¶20]
8.236.2. [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2017-3, Q4.171, as amended by GASBS XX, ¶11]
[In heading 8.237, replace Prepared Using with Presented Applying.]
8.241.2. [Replace prepared using with presented applying.] [GASBIG 2017-3, Q4.188, as amended by GASBS XX, fn10]
8.245.1. [Replace on the with applying the economic resources measurement focus and.] [GASBIG 2017-3, Q4.196, as amended by GASBS XX, fn10]
8.245.2. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.197, as amended by GASBS XX, fn10]
8.245.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.198, as amended by GASBS XX, fn10]
[In heading 8.267, replace Prepared Using with Presented Applying.]
[In heading 8.268, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
8.268.1. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.270, as amended by GASBS XX, ¶12 and ¶20]
8.268.2. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.271, as amended by GASBS XX, ¶12 and ¶20]
[In heading 8.282, replace Prepared Using with Presented Applying.]
8.288.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.297, as amended by GASBS XX, fn10]
8.288.2. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.298, as amended by GASBS XX, fn10]
8.288.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.299, as amended by GASBS XX, fn10]
[In heading 8.293, replace Prepared Using with Presented Applying.]
[In heading 8.300, replace Prepared Using with Presented Applying.]
8.308.1. [Replace on the accrual basis of accounting with applying the economic resources measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.323, as amended by GASBS XX, fn10]
8.308.2. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.324, as amended by GASBS XX, fn10]
8.308.3. [Replace prepared using with presented applying and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.325, as amended by GASBS XX, fn10]
[In heading 8.309, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
8.309.1. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.326, as amended by GASBS XX, ¶12 and ¶20]
8.309.2. [Delete and payable; replace prepared using with presented applying; replace current with short-term; and replace measurement focus with measurement focus and accrual basis of accounting.] [GASBIG 2017-3, Q4.327, as amended by GASBS XX, ¶12 and ¶20]
[In heading 8.337, replace Prepared Using with Presented Applying.]
[In heading 8.356, replace Prepared Using with Presented Applying.]
[In heading 8.357, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
[Revise Question 8.357.1 as follows:]
8.357.1. Q—If, at the end of the reporting period, benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of Statement 75, should any portion of an employer’s total OPEB liability be recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting?
A—Yes. In circumstances in which benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of Statement 75, the employer should recognize an amount
equal to the amount of benefit payments due as an OPEB liability in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting.
[GASBIG 2017-3, Q4.410, as amended by GASBS XX, ¶12 and ¶20]
[In heading 8.370, replace Prepared Using with Presented Applying.]
[In heading 8.381, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
[Revise Question 8.381.1 as follows:]
8.381.1. Q—If, at the end of the reporting period, benefit payments are due for OPEB provided to the employees of a primary government and its component units through the same OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of Statement 75, should any portion of a government’s proportionate share of the collective total OPEB liability be recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting?
A—Yes. In circumstances in which benefit payments are due for OPEB provided to the employees of a primary government and its component units through the same OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of Statement 75, a government should recognize an amount equal to its proportionate share of the amount of benefit payments due as an OPEB liability in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting.
[GASBIG 2017-3, Q4.440, as amended by GASBS XX, ¶12 and ¶20]
[In heading 8.391, replace Prepared Using with Presented Applying.]
[In heading 8.402, replace Prepared Using with Presented Applying.]
[In heading 8.411, replace Prepared Using with Presented Applying; replace Current with Short-Term; and delete Modified.]
[Revise Question 8.411.1 as follows:]
8.411.1.
Q—If, at the end of the reporting period, benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of Statement 75, should any portion of a governmental nonemployer contributing entity’s proportionate share of the collective total OPEB liability be recognized in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting?
A—Yes. In circumstances in which benefit payments are due for OPEB provided through an OPEB plan that is not administered through a trust that meets the criteria in paragraph 4 of Statement 75, the governmental nonemployer contributing entity should recognize an amount equal to its proportionate share of the amount of benefit payments due as an OPEB liability in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting.
[GASBIG 2017-3, Q4.466, as amended by GASBS XX, ¶12 and ¶20]
[Delete Question 9.8.1.]
9.10.1. [Replace governmental funds balance sheet with short-term financial resources balance sheet.] [GASBIG 2015-1, Q9.10.1, as amended by GASBS XX, ¶11]
9.11.1. [Replace revenue and expenditure with inflows of resources and outflows of resources; replace prepared on a current financial resources with presented applying the short-term financial resources; and delete modified.] [GASBIG 2015-1, Q9.11.1, as amended by GASBS XX, ¶12 and ¶27]
9.11.2. [Replace tax revenues with inflows of tax resources; replace Statement 34 with Statement XX; and replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBIG 2015-1, Q9.11.2, as amended by GASBS XX, ¶11 and ¶27]
9.11.3. [Replace noncapital expenditures with noncapital outflows of resources.] [GASBIG 2015-1, Q9.11.3, as amended by GASBS XX, ¶27]
9.11.4. [Replace expenditures with outflows of resources.] [GASBIG 2015-1, Q9.11.4, as amended by GASBS XX, ¶27]
[Revise Question 9.11.5 as follows:]
9.11.5. Q—How can a government obtain the noncapital outflows of resources required to calculate the debt service ratio?
A—Noncapital outflows of resources equal total governmental fund outflows of resources from both current and noncurrent activities, less:
  1. The amount reported separately in the changes in fund balances schedule as capital outlay or capital outflows of resources (to the extent capitalized for the government-wide statement of net position), and
  2. Any outflows of resources for capitalized assets contained within the functional outflows of resources categories.
The sum of these two amounts should be reported by the government as a reconciling item in its reconciliation of the statement of short-term financial resource flows of the governmental funds to the statement of activities.
[GASBIG 2015-1, Q9.11.5, as amended by GASBS XX, ¶11 and ¶27]
9.23.4. [In the question, replace property tax revenue with property tax revenues or inflows of short-term financial resources; in the first sentence of the answer, replace revenues with revenues/inflows of short-term financial resources; and revise the second sentence as follows:] In both financial statements presented applying the economic resources measurement focus and accrual basis of accounting and financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, in any given year revenues/inflows of short-term financial resources may include amounts levied but not yet collected. This information is intended to help a user understand a government’s ability to collect the amounts it levies within a particular period, rather than provide a detailed breakdown of the revenues/inflows of short-term financial resources recognized in a given year. [GASBIG 2015-1, Q9.23.4, as amended by GASBS XX, ¶12, ¶22, and fn10]
9.41.3. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, Q9.41.3, as amended by GASBS XX, ¶23]
10.44.2. [Revise the answer as follows:] Financial statements presented applying the economic resources measurement focus and accrual basis of accounting (government-wide financial statements and proprietary and fiduciary funds) should report the up-front payment as an increase of debt. Financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting (governmental funds) should report the up-front payment in net flows from noncurrent activities. [GASBIG 2015-1, Q10.44.2, as amended by GASBS XX, ¶12, ¶27, and fn10]
11.23.1. [Replace expenditures with outflows of resources.] [GASBIG 2019-2, Q4.17, as amended by GASBS XX, ¶27]
11.24.3. [Replace expenditures with outflows of resources.] [GASBIG 2019-2, Q4.20, as amended by GASBS XX, ¶27]
[In heading 12.48, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end:] and Accrual Basis of Accounting
[In heading 12.82, replace Prepared Using with Presented Applying; replace Current with Short-Term; and add the following to the end:] and Accrual Basis of Accounting
12.116.1. [Replace economic resources measurement focus with economic resources measurement focus and accrual basis of accounting and delete the last sentence of the answer.] [GASBIG 2019-3, Q4.70, as amended by GASBS XX, ¶23 and fn10]
[Delete Question Z.16.2.]
Z.24.1. [Replace revenues and expenditures with inflows of short-term financial resources and outflows of short-term financial resources and replace in the funds with in the governmental funds.] [GASBIG 2015-1, QZ.24.1, as amended by GASBS XX, ¶22 and ¶23 and GASBIG 2016-1, Q5.38]
Z.33.4. [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBIG 2016-1, Q4.70, as amended by GASBS XX, ¶22]
Z.33.5. [Replace revenue with an inflow of short-term financial resources/revenue.] [GASBIG 2015-1, QZ.33.5, as amended by GASBS XX, ¶22]
Z.33.6. [Replace expense/expenditure with outflow of short-term financial resources/ expense.] [GASBIG 2015-1, QZ.33.6, as amended by GASBS XX, ¶23]
Z.33.8. [Delete (subject to the availability criterion in governmental funds).] [GASBIG 2015-1, QZ.33.8, as amended by GASBS XX, ¶12 and ¶17]
Z.33.9. [Replace revenues with inflows of short-term financial resources/revenues and replace (or as deferred inflows of resources in governmental funds if not available) with except when applying the short-term financial resources measurement focus and accrual basis of accounting for transactions classified as long-term transactions.] [GASBIG 20151, QZ.33.9, as amended by GASBS XX, ¶12 and ¶22]
Z.33.10. [Replace revenue with inflows of short-term financial resources/revenue and add the following at the end of the first sentence of the answer:] , except for when applying the short-term financial resources measurement focus and accrual basis of accounting for transactions classified as long-term transactions [GASBIG 2015-1, QZ.33.10, as amended by GASBS XX, ¶12 and ¶22]
Z.33.11. [Revise the first sentence of the question as follows:] Paragraph 18 of Statement 33 states that “governments should recognize revenues from property taxes, net of estimated refunds and estimated uncollectible amounts, in the period for which the taxes are levied . . . .” (The paragraph also applies to recognition of inflows of short-term financial resources, except for transactions classified as long-term transactions, when applying the short-term financial resources measurement focus and accrual basis of accounting.) [GASBIG 2015-1, QZ.33.11, as amended by GASBS XX, ¶12 and ¶22]
Z.33.15. [Replace expenditures with costs; replace paragraph 21 of Statement 33 requires with paragraph 21 of Statement 33 and paragraph 20 and 23 of Statement XX require; replace accrual or the modified accrual with economic resources measurement focus and accrual basis of accounting or the short-term financial resources measurement focus and accrual; and insert (and are short-term transactions if reported in governmental funds) at the end of the answer.] [GASBIG 2015-1, QZ.33.15, as amended by GASBS XX, ¶20, ¶23, and fn10]
Z.33.16. [Replace revenue with inflows of short-term financial resources/revenue.] [GASBIG 2015-1, QZ.33.16, as amended by GASBS XX, ¶22]
[Revise Question Z.33.18 as follows:]
.710-3 Q—A government is awarded an expenditure-driven grant for construction of a facility. Could recognition of inflows of short-term financial resources/revenue
be delayed until construction is complete, similar to the completed-contract method?
A—No. Inflows of short-term financial resources/revenue from expenditure-driven (reimbursement) grants, including those used for capital projects, should be recognized as outlays are incurred, provided all other eligibility requirements are met (and are short-term transactions if reporting in governmental funds).
[GASBIG 2015-1, QZ.33.18, as amended by GASBS XX, ¶22 and ¶23]
Z.33.20. [Replace expenses with outflows of short-term financial resources/expenses and revenues with inflows of short-term financial resources/revenues.] [GASBIG 2015-1, QZ.33.20, as amended by GASBS XX, ¶22 and ¶23]
Z.33.21. [Revise the answer as follows:] When a nongovernmental provider does not specify otherwise, governments should recognize voluntary nonexchange transactions in full in the first period that use is permitted and all other applicable eligibility requirements have been met (and are short-term transactions if reported in governmental funds). [GASBIG 2015-1, QZ.33.21, as amended by GASBS XX, ¶12 and ¶22]
Z.33.22. [Revise the answer as follows:] The measurement focus of governmental funds is short-term financial resources. Therefore, if a capital asset is donated to a government, no asset or inflow of short-term financial resources is recorded in the governmental fund. [GASBIG 2016-1, Q4.71, as amended by GASBS XX, ¶12 and ¶19]
Z.33.24. [Replace expenditures and expenses with outflows of short-term financial resources and expenses; replace revenue with inflows of short-term financial resources and revenues; and replace revenues with inflows of short-term financial resources and revenues.] [GASBIG 2015-1, QZ.33.24 as amended by GASBS XX, ¶22 and ¶23]
Z.33.27. [Replace revenue with inflows of short-term financial resources/revenues and insert (and are short-term transactions if reported in governmental funds) at the end of the answer.] [GASBIG 2019-1, Q4.7, as amended by GASBS XX, ¶12 and ¶22]
Z.42.4. [Revise the second sentence of the answer as follows:] FEMA grants are nonexchange transactions; should be reported as program revenue in the government-wide financial statements, as inflows of short-term financial resources in governmental fund financial statements, and as nonoperating revenue in enterprise and internal service fund financial statements; and should not be netted against any associated impairment loss. [GASBIG 2015-1, QZ.42.4, as amended by GASBS XX, ¶22]
Z.42.14. [In the question, replace special item, or extraordinary item with or unusual or infrequent item and in the answer, replace special items or extraordinary items with unusual or infrequent items.] [GASBIG 2015-1, QZ.42.14, as amended by GASBS XX, ¶10]
Z.42.15. [Replace expenditures with outflows of resources and replace other financing sources or extraordinary items with outflows of resources from current activities or unusual or infrequent items.] [GASBIG 2019-1, Q4.8, as amended by GASBS XX, ¶10 and ¶27]
Z.48.13. [Insert in the statement of net position and an inflow of short-term financial resources from noncurrent activities in governmental funds at the end of the first sentence of the answer. Replace expenditures with outflows of short-term financial resources from current activities; replace revenue with revenue/inflow of short-term financial resources from current activities; and replace expenditure with outflow of short-term financial resources from current activities.] [GASBIG 2015-1, QZ.48.13, as amended by GASBS XX, ¶22 and ¶23]
Z.48.14. [Replace specific revenues with specific revenues/inflows of short-term financial resources.] [GASBIG 2015-1, QZ.48.14, as amended by GASBS XX, ¶22]
Z.48.15. [Replace other financing source with inflow of short-term financial resources.] [GASBIG 2015-1, QZ.48.15, as amended by GASBS XX, ¶22 and GASBIG 2016-1, ¶3]
Z.49.2. [Revise the third sentence in the answer as follows:] Statement 18, as amended, requires recognition of the estimated total current cost of closure and postclosure care applying the appropriate measurement focus and basis of accounting. [GASBIG 2015-1, QZ.49.2, as amended by GASBS XX, ¶12]
[Delete Questions Z.54.2 and Z.54.4.]
Z.54.5. [Replace receivables or the sale of properties held for resale with interfund loans receivable.] [GASBIG 2015-1, QZ.54.5, as amended by GASBS XX, ¶12]
Z.54.6. [Replace those that are not in spendable form with interfund loans receivable; replace “resources not in spendable form” with “interfund loans receivable”; and replace Inventories and prepaid amounts with Long-term portion of interfund loans.] [GASBIG 2015-1, QZ.54.6, as amended by GASBS XX, ¶12 and ¶26]
Z.54.8. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.8, as amended by GASBS XX, ¶28]
Z.54.9. [Replace special revenue fund with special resources fund and replace a restricted revenue source with inflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.9, as amended by GASBS XX, ¶22 and ¶28]
Z.54.10. [Replace basis of accounting with measurement focus.] [GASBIG 2015-1, QZ.54.10, as amended by GASBS XX, ¶12]
Z.54.11. [Replace current-period revenues with current-period inflows of short-term financial resources and replace future revenues with future resources.] [GASBIG 2015-1, QZ.54.11, as amended by GASBS 87, ¶20 and GASBS XX, ¶22]
Z.54.12. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.12, as amended by GASBS XX, ¶28]
Z.54.13. [Replace budgeted revenue and other financing sources with budgeted resources and replace expected expenditures over expected revenues with expected budgetary outflows over expected budgetary inflows.] [GASBIG 2015-1, QZ.54.13, as amended by GASBS XX, ¶27]
[Delete Question Z.54.15.]
Z.54.16. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.16, as amended by GASBS XX, ¶23]
Z.54.17. [Revise the last sentence of the answer as follows:] Committed fund balances should not be reduced by outflows of short-term financial resources exceeding resources that are committed or assigned to other purposes in that fund. [GASBIG 2015-1, QZ.54.17, as amended by GASBS XX, ¶23]
[Delete Question Z.54.18.]
Z.54.19. [Replace expenditures with outflows of short-term financial resources and replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.19, as amended by GASBS XX, ¶23 and ¶28]
Z.54.23. [Replace expended with used; replace revenues with inflows of short-term financial resources; and replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.23, as amended by GASBS XX, ¶22, ¶23, and ¶27]
Z.54.24. [Replace revenues with inflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.24, as amended by GASBS XX, ¶22]
Z.54.26. [In the question, replace special revenue fund with special resources fund and revise the second sentence of the answer as follows:] Because the foundation of the separate fund is a specific committed inflow of short-term financial resources from current activities other than transfers, it can be reported as a special resources fund, provided that the inflows of short-term financial resources are recognized in the separate fund. [GASBIG 2015-1, QZ.54.26, as amended by GASBS XX, ¶22 and ¶28]
Z.54.27. [Replace balance sheet with short-term financial resources balance sheet.] [GASBIG 2015-1, QZ.54.27, as amended by GASBS XX, ¶11]
Z.54.30. [In the answer, replace special revenue funds with special resources funds and revise the question as follows:] Are governments required to use special resources funds to report restricted or committed inflows of short-term financial resources from current activities other than transfers? [GASBIG 2015-1, QZ.54.30, as amended by GASBS XX, ¶22 and ¶28]
[Revise Question Z.54.31 as follows:]
Z.54.31. Q—Can assigned inflows of short-term financial resources be reported in a special resources fund?
A—Yes. However, the fund is required to also include substantial restricted or committed inflows of short-term financial resources from current activities other than transfers as its foundation. Assigned inflows of short-term financial resources cannot be the foundation for establishing a special resources fund.
[GASBIG 2015-1, QZ.54.31, as amended by GASBS XX, ¶22 and ¶28]
[Revise Question Z.54.32 as follows:]
Z.54.32. Q—In order to satisfy the criteria for reporting as a special resources fund, are restricted or committed inflows of short-term financial resources from current activities other than transfers required to constitute a substantial portion of the resources in the fund?
A—The requirement is that restricted or committed inflows of short-term financial resources from current activities other than transfers should comprise a substantial portion of the inflows of the fund. Inflows of the fund would include transfers or assigned inflows of short-term financial resources in addition to restricted or committed inflows of short-term financial resources.
[GASBIG 2015-1, QZ.54.32, as amended by GASBS XX, ¶22 and ¶28]
Z.54.33. [Replace special revenue fund with special resources fund and replace revenue with inflow of short-term financial resources.] [GASBIG 2015-1, QZ.54.33, as amended by GASBS XX, ¶22 and ¶28]
[Delete Question Z.54.34.]
Z.54.35. [Replace restricted revenue source with restricted source of inflows of short-term financial resources; replace special revenue funds with special resources funds; and replace revenue transfers with inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.35, as amended by GASBS XX, ¶22 and ¶28]
[Revise Question Z.54.36 as follows:]
Z.54.36. Q—In addition to its regular general fund corporate levy, a city government levies several dedicated property taxes that can be used only for the purposes set forth in the individual levies. Tax collections from all levies are received in the general fund. Collections from the dedicated levies are recognized as “due to other funds,” rather than inflows of short-term financial resources in the general fund, and distributed to other funds for use in accordance with the specific purposes for which they were levied. Do those distributions constitute restricted inflows of short-term financial resources from current activities other than transfers in the receiving funds so that they can be reported as special resources funds?
A—Yes, the taxes represent restricted inflows of short-term financial resources from current activities other than transfers and a receiving fund could be reported as a special resources fund, provided that the taxes and other restricted or committed inflows of short-term financial resources represent a substantial portion of the inflows into the fund.
[GASBIG 2015-1, QZ.54.36, as amended by GASBS XX, ¶22, ¶27, and ¶28]
Z.54.37. [Replace special revenue fund with special resources fund and replace revenue with inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.37, as amended by GASBS XX, ¶22 and ¶28]
Z.54.38. [Replace revenue source with source of inflows of short-term financial resources; replace special revenue fund with special resources fund; replace specific revenue with specific inflow of short-term financial resources from current activities other than transfers; and replace recognized as revenue with recognized as an inflow of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.38, as amended by GASBS XX, ¶22 and ¶28]
Z.54.39. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.39, as amended by GASBS XX, ¶28]
Z.54.40. [Replace special revenue fund with special resources fund and replace revenues with inflows of short-term financial resources from current activities other than transfers.] [GASBIG 2015-1, QZ.54.40, as amended by GASBS XX, ¶22 and ¶28]
Z.54.41. [Replace special revenue with special resources and replace revenues and expenditures with budgetary inflows of resources and budgetary outflows of resources.] [GASBIG 2015-1, QZ.54.41, as amended by GASBS XX, ¶27 and ¶28]
Z.54.42. [Replace expenditures with outflows of short-term financial resources.] [GASBIG 2015-1, QZ.54.42, as amended by GASBS XX, ¶23]
Z.54.43. [In the question, replace special revenue fund with special resources fund and revise the answer as follows:] The separate fund does not meet the criteria to be reported as a special resources fund because the source of the resources is transfers. A separate capital projects fund may be reported, but it is not required. [GASBIG 2015-1, QZ.54.43, as amended by GASBS XX, ¶28]
[Delete Questions Z.54.46 and Z.54.48.]
Z.54.50. [Replace special revenue fund with special resources fund.] [GASBIG 2015-1, QZ.54.50, as amended by GASBS XX, ¶28 and GASBIG 2016-1, Q5.41]
Z.54.54. [Replace less revenue with less resources and replace excess of expenditures over expected revenues with excess of budgetary outflows over budgetary inflows.] [GASBIG 2015-1, QZ.54.54, as amended by GASBS XX, ¶27]
Z.54.56. [Replace budgets revenues with budgets inflows; replace appropriations over revenues with appropriations over budgetary inflows of resources; and replace expected expenditures over expected revenues with budgetary outflows over budgetary inflows.] [GASBIG 2015-1, QZ.54.56, as amended by GASBS XX, ¶27]
Z.54.57. [Replace expenditures with outflows of resources; replace they are not revenues with they are not inflows of short-term financial resources from current activities other than transfers; replace special revenue fund with special resources fund; replace tax revenues with tax inflows of short-term financial resources; replace use of the revenues with use of the inflows; and delete the last sentence of the answer.] [GASBIG 2015-1, QZ.54.57, as amended by GASBS XX, ¶12, ¶22, ¶23, and ¶28]
Z.54.59. [Replace special revenue fund with special resources fund and replace grant revenues with inflows of short-term financial resources from grants.] [GASBIG 2015-1, QZ.54.59, as amended by GASBS XX, ¶22 and ¶28]
Z.54.60. [Revise the question as follows:] A special resources fund is used by a local government to account for an inflow of short-term financial resources that is restricted by state statute to be spent for a specific purpose. At year end, the entire fund balance is classified as restricted. Next year’s budget projects an excess of budgetary outflows over budgetary inflows, causing the government to include a portion of existing fund balance as a budgetary resource. Should the amount necessary to balance the budget be classified as assigned? [GASBIG 2015-1, QZ.54.60, as amended by GASBS XX, ¶22, ¶27, and ¶28]
Z.54.63. [Replace appropriated expenditures with budgetary outflows and replace budgeted revenues with budgeted inflows.] [GASBIG 2015-1, QZ.54.63, as amended by GASBS XX, ¶27]
Z.54.64. [Replace paragraph 30 of Statement 54 with paragraph 30 of Statement 54 and paragraph 28 of Statement XX; replace expenditures with outflows of resources; and replace special revenue fund with special resources fund.] [GASBIG 2016-1, Q4.73, as amended by GASBS XX, ¶27 and ¶28]
Z.54.65. [Replace Paragraph 87 of Statement 34 with Paragraph 87 of Statement 34, as amended, and paragraph 27 of Statement XX; replace expenditures with outflows of resources; and replace guidance in Statement 34 with guidance in Statement 34, as amended, and Statement XX.] [GASBIG 2017-1, Q4.38, as amended by GASBS XX, ¶27]
[Delete Question Z.54.66.]
Z.81.1. [Replace A university with A university reported as a business-type activity.] [GASBIG 2019-1, Q4.13, as amended by GASBS XX, ¶22 and ¶25]
[Delete Question Z.81.2.]

1Those key components include the accounting and financial reporting requirements in National Council on Governmental Accounting (NCGA) Statement 1, Governmental Accounting and Financial Reporting Principles, as amended, Governmental Accounting Standards Board (GASB) Statements No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, as amended, and No. 35, Basic Financial Statements—and Management’s Discussion and Analysis—for Public Colleges and Universities, as amended.

2For purposes of MD&A, currently known refers to information that management is aware of as of the date the financial statements are issued.

3If a letter of transmittal is presented in the introductory section of a comprehensive annual financial report (CAFR), governments are encouraged not to duplicate information contained in MD&A.

4Governments can provide additional details about the required topics in subparagraphs (a)–(e). Information that does not relate to the required topics should not be included in MD&A but may be provided elsewhere, such as in the letter of transmittal or in other forms of supplementary information.

5Paragraphs 116–120 of Statement 34, as amended, require certain disclosures about capital assets and long-term liabilities, including long-term debt and leases. It may be sufficient for purposes of this discussion in MD&A to summarize that information and refer the user to those disclosures for additional details.

6Intangible assets subject to the provisions of Statement 51, as amended, and intangible right-to-use assets subject to the provisions of Statement 87, as amended, Statement 94, and Statement 96 are considered capital assets.

7See footnote 2.

8Conditions that are expected to have a significant effect on financial position or that are expected to produce significant differences from current period results of operations, including those that give rise to substantial doubt about a government’s ability to continue as a going concern, are described in paragraphs 16–19 of Statement 56.

9The end of the reporting period for liabilities to employees for benefits provided through a defined benefit postemployment benefit plan is the measurement date.

10This provision amends discussions of other measurement focuses and bases of accounting in National Council on Governmental Accounting and GASB pronouncements and related terminology, as applicable, to be consistent with terminology used in this Statement regarding the application of the short-term financial resources measurement focus and accrual basis of accounting.

11As used for the purposes of recognition in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, transaction may or may not be the same as unit of account. Paragraph 8 of Statement 72 defines unit of account as “the level at which an asset or a liability is aggregated or disaggregated for measurement, recognition, or disclosure purposes.”

12For purposes of this determination, the definition of debt in paragraph 4 of Statement No. 88, Certain Disclosures Related to Debt, including Borrowings and Direct Placements, should be used.

13 Paragraph 19 of Statement 9 requires that cash flows from “program loans” be reported as operating activities. Those activities also would be reported as operating revenues and expenses.

14Paragraph 78

15Paragraph 87

16Paragraph 19

17Paragraph 77(b)

18Paragraph 252

19Paragraphs 237–238

20Paragraph 212

21Paragraph 77(a)

22Paragraph B41

23[GASBS XX, fn12; renumber subsequent footnotes.]

24[Insert original footnote 5.]

25[Replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBS 62, ¶3; GASBS 62, fn23, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]

28[Insert renumbered footnote 28; replace statement of revenues, expenditures, and changes in fund balances with statement of short-term financial resource flows.] [GASBS 62, ¶3; GASBS 62, fn23, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]

46[Insert renumbered footnote 46.]

56[Insert renumbered footnote 56.]

57[Insert renumbered footnote 57.]

30[Revise footnote 5 as follows:] Noncapital outflows of resources are calculated by subtracting the following from total outflows of resources from both current and noncurrent activities: (a) capital outlay or capital outflows of resources (to the extent capitalized for the government-wide statement of net position) and (b) outflows of resources for capitalized assets contained within the functional categories of outflows of resources from current activities. [GASBS 44, fn5, as amended by GASBS 63, ¶8 and GASBS XX, ¶27]

31For purposes of recognition in financial statements presented applying the short-term financial resources measurement focus and accrual basis of accounting, a derivative instrument that is determined to be ineffective is recognized as a short-term transaction (an investment) and adjustments to carrying value are recognized when other events occur (that is, changes in fair value). [GASBS XX, ¶19]

32[Insert current footnote 7; insert the statement of short-term financial resource flows; after the statement of activities;.] [GASBS 53, fn7, as amended by GASBS 63, ¶8 and GASBS XX, ¶11]

33[Insert current footnote 7.]

34[Insert current footnote 7.]

35[Insert current footnote 6.]

36[Insert current footnote 10.]

37[Insert current footnote 6.]

38Deferred inflows of resources and deferred outflows of resources resulting from intra-entity sales of future revenues and the periodic recognition of those balances as revenues/inflows of short-term financial resources and expenses/outflows of short-term financial resources should be accounted for similarly to internal balances and intra-entity activity within the financial reporting entity. [GASBS 65, fn5, as amended by GASBS XX, ¶22 and ¶23]

39[Insert current footnote 1.]

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