GASB Update Governmental Research Association July 24, 2019 Dean Michael Mead, Senior Research Manager Coordinator, Governmental Accounting Standards Advisory Council Mr. Mead.

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Earlier application is encouraged Statement No. 88, Debt Disclosures, including Direct Borrowings and Direct Placements What? Statement 88 establishes a definition of debt that should be included in notes, distinguishes direct borrowings and direct placements from other debt, and requires some new disclosures. Why? A review of existing standards related to disclosures of debt found that debt disclosures provide useful information, but that certain improvements could be made When? FYEs 6-30-19 and later Earlier application is encouraged

Earlier application is encouraged Statement No. 87, Leases What? Eliminates the distinction between operating and capital leases. Most leases will appear on the face of the financial statements as an intangible right-to-use asset and a long-term liability. Why? All leases are financings of the right to use a capital asset. Their economic substance is the same as borrowing and should be reported accordingly. When? FYEs 12-31-20 and later Earlier application is encouraged

Statement No. 91, Conduit Debt Obligations What? Statement 91 clarifies the definition of conduit debt and highlights additional commitments by issuers to support the debt service payments of third-party borrowers Why? Improvements to existing standards were needed to eliminate diversity in practice When? FYEs 12-31-21 and later Earlier application is encouraged

Exposure Draft: Omnibus What? The Board has proposed amendments to existing standards covering multiple topics, including transfers of assets to pension plans Why? Omnibus projects are used to address issues in multiple pronouncements that, individually, would not justify a separate project When? Comment deadline is October 4, 2019

Exposure Draft: P3s, APAs, and SCAs What? The Board has proposed standards for public-private and public-public partnerships (P3s), availability payment arrangements (APAs), and service concession arrangements (SCAs) Why? GASB research found that some P3 transactions are outside the scope of Statement 60 and identified opportunities to improve Statement 60’s guidance for SCAs When? Comment deadline is September 13, 2019

2020 Proposals: Disclosure Framework What? The Board will propose concepts that guide standards-setting decisions regarding the information that should be disclosed in notes, including the target user Why? The GASB reexamined existing note disclosure requirements and concluded that it was necessary to elaborate on the concept of “essential” as it relates to notes When? First quarter of 2020

2020 Proposals: Financial Reporting Model What? The Board will make its final proposal on governmental fund financial statements, budgetary comparisons, and management’s discussion and analysis Why? A review of those standards found that they generally were effective, but that there were aspects that could be significantly improved When? Second quarter of 2020

Revenue and Expense Recognition What? The Board will issues its second proposal regarding how and when revenues and expenses should be reported in financial statements Why? Guidance for exchange transactions is limited; guidance for nonexchange transactions could be improved and clarified When? Second quarter of 2020

Thank you for your involvement! Phyllis Resnick – Governmental Accounting Standards Advisory Council (GASAC) Joe Adams – Note Disclosure Research Consultative Group Eric Lupher – Revenue and Expense Recognition Task Force Stephen Stuart – Financial Reporting Model Reexamination Task Force Sarah Wetmore – Going Concern Disclosure Consultative Group To everyone who has responded to a survey or participated in an interview or roundtable

Get involved or stay involved Phyllis needs your input on matters being discussed by the GASAC – she is the sole member with a GRA-type perspective Keep an eye out for opportunities to respond to surveys or participate in interviews or roundtables Take a look at proposed standards that interest you (particularly the Financial Reporting Model and Revenue and Expense Recognition projects) and share your views with the Board – either by comment letter or participation in a user forum