|
|
|
GASB Statements 34/35 Implementation |
|
Morning Session |
|
April 30 and May 2, 2001 |
|
|
|
|
|
SC Department of Archives and History |
|
Dr. Rodger E. Stroup, Executive Director (April
30, 2001) |
|
Ms. Milly A. Hough, Director of External Affairs
(May 2, 2001) |
|
SC Office of the Comptroller General |
|
Comptroller General Jim Lander |
|
|
|
|
|
Kathy Glass, Senior Manager |
|
KPMG LLP, Greenville, SC |
|
Jack Reagan, Senior Manager |
|
KPMG LLP, Washington, DC |
|
|
|
|
|
Drinks available in hall at breaks |
|
No food/drinks allowed in auditorium |
|
Drinks allowed in Wachovia rooms |
|
Telephones |
|
Restrooms |
|
Lunch break – map with area restaurants |
|
Sign-in for morning and afternoon sessions |
|
CPE forms |
|
Course evaluation |
|
|
|
|
|
GASB 34/35 – Overview of the Statements |
|
March 2001 Quarterly Reporting Progress |
|
Technical Discussion |
|
Capital
Assets Requirements |
|
GASB 33
- Overview |
|
Technical Literature/Resources |
|
Questions |
|
|
|
|
GASB 33
Implementation Issues |
|
Closing Package/Financial Reporting Issues |
|
STARS Changes |
|
Other Discussion |
|
Open Forum |
|
|
|
|
|
|
Overview of the Statements |
|
|
|
|
|
Management’s Discussion and Analysis (MD&A) |
|
Basic Financial Statements |
|
Government-wide |
|
Fund |
|
Notes |
|
Required Supplementary Information (RSI) |
|
|
|
|
GASB 34/35 are required for South Carolina State
Agencies and Colleges & Universities reports for fiscal year |
|
|
|
|
|
|
|
|
Primarily impacts the OCG and financial
statement preparers |
|
Brief description of basic statements |
|
Significant variances |
|
Analysis of budgetary changes and results |
|
Description of capital asset and long-term debt
activity |
|
|
|
|
Government-Wide Statements |
|
|
|
|
|
|
|
Statement of Net Assets |
|
Statement of Activities |
|
Consolidated |
|
Include governmental and business type
activities |
|
Economic resources measurement |
|
Accrual basis of accounting |
|
|
|
|
|
|
|
|
|
|
|
All assets (including infrastructure) and
liabilities |
|
Net assets (rather than fund balances, retained
earnings,etc.) |
|
Invested in capital assets, net of related debt |
|
Restricted |
|
Unrestricted |
|
Classified balance sheet |
|
|
|
|
|
|
|
|
|
|
|
Net cost format (expenses minus program revenue
= net cost) |
|
Expenses by functions/programs |
|
Revenues by: |
|
Charges for services |
|
Operating grants and contributions |
|
Capital grants and contributions |
|
General (e.g., taxes and other non-program
revenue) |
|
|
|
|
|
|
|
|
Characteristics of governmental fund statements: |
|
Current financial resources measurement |
|
Modified accrual basis of accounting |
|
Reconciliation required between fund and
government-wide statements |
|
No capital assets or long term obligations |
|
Permanent funds |
|
|
|
|
|
Accrual basis of accounting |
|
Enterprise funds redefined |
|
Fund net assets |
|
Replace retained earnings/contributed capital |
|
Must distinguish between operating and
non-operating revenues/expenses |
|
Direct method required for cash flow statements |
|
|
|
|
Economic resources measurement |
|
Accrual basis of accounting |
|
Redefined--cannot be used to support the
government’s own programs |
|
Replace expendable and non-expendable trust fund
types |
|
|
|
|
|
|
Overall Objectives |
|
Communicate state agency’s GASB 34 progress on a
quarterly basis |
|
Identify significant agency issues/assist in
their resolution |
|
Due each quarter through June 30, 2002 |
|
|
|
|
|
|
|
Form Content |
|
Progress toward initial implementation issues
identified |
|
Additional significant issues identified –
progress reported |
|
Significant roadblocks encountered |
|
|
|
|
CATEGORY |
|
Agency Submissions |
|
|
|
No Significant Issues |
|
|
|
No Progress Toward Issues |
|
|
|
Fixed Assets - |
|
Significant Issue |
|
|
|
|
|
|
Significant Issues (Projects) / Progress |
|
Fixed Assets |
|
System requirements |
|
Proper classification |
|
Title issues |
|
Financial Statement Preparation |
|
STARS Changes – internal versus external
transactions |
|
|
|
|
|
General Areas of Concern |
|
Accounting issues – understanding OCG policies |
|
System modifications – for reporting |
|
Available resources/staffing |
|
Auditor approval of changes |
|
|
|
|
Capital Assets and Infrastructure |
|
|
|
|
|
Issued in February 2001 |
|
Excludes specific infrastructure policies |
|
Includes: |
|
Policies - depreciable lives/methods, works of
art, historical treasures |
|
Capitalization limits |
|
Example display of classes of assets |
|
Example worksheet model for depreciation |
|
|
|
|
|
Recorded at historical cost |
|
Cost includes necessary charges for placing
asset in service |
|
Freight charges |
|
Professional fees |
|
Site preparation costs |
|
|
|
|
|
Recorded at estimated fair value (date of
donation) |
|
Fair value – amount exchanged in transaction by
willing parties |
|
Recent sales of similar assets |
|
Price quotes |
|
Manufacturer catalogs |
|
|
|
|
|
Land/non-depreciable land improvements |
|
All must be capitalized – no threshold |
|
Depreciable land improvements, buildings,
building improvements |
|
$100,000 |
|
Intangible assets |
|
$100,000 |
|
|
|
|
|
Machinery and equipment, vehicles, works of art
and historical treasures |
|
$5,000 |
|
Infrastructure |
|
To be finalized (at least $500,000) |
|
|
|
|
|
Assets recorded below capitalization limits at
July 1, 2001 |
|
Required removal from agency’s capital assets
ledger |
|
Amount removed required to be disclosed in
closing packages at June 30, 2002 or on financial statements |
|
|
|
|
|
|
|
|
Movable assets between $1,000 and $5,000 |
|
Required to continue to tag for internal control
purposes |
|
Required to maintain a current listing |
|
Tag number |
|
Description |
|
Location |
|
Cost |
|
Do not report on closing package or on financial
statements |
|
|
|
|
|
For permanent improvement projects $25,000 -
$100,000 |
|
Agencies no longer required to submit Form A-13
to the OCG |
|
Continue to report active permanent improvement
projects below threshold if included in CIP at June 30, 2001 |
|
Upon completion of project, remove from records |
|
|
|
|
|
Non-Depreciable |
|
Land/ improvements |
|
Inexhaustible works of art, historical treasures |
|
CIP |
|
|
|
|
|
|
|
Land improvements – non depreciable |
|
Produce permanent benefits |
|
Example- filling and excavation costs |
|
Land improvements – depreciable |
|
Deteriorate with use or the passage of time |
|
Example – fencing, landscaping, lighting,
parking lots, paving |
|
|
|
|
|
|
|
|
Buildings/building improvements – depreciable |
|
Capitalize improvements if: |
|
Adds square footage to asset |
|
Prepares building for new use (major renovation) |
|
Extends useful life |
|
|
|
Record as repairs/maintenance expense if does
not meet capitalization criteria |
|
|
|
|
|
Buildings/building improvements – depreciable |
|
May use composite method (i.e. parts of a single
building) |
|
Intangible assets |
|
Include external purchased software |
|
Trademarks, patents |
|
|
|
|
|
Works of art, historical treasures |
|
Individual items – must always capitalize |
|
Collections |
|
Collections – optional capitalization if meet 3
requirements |
|
Held for public exhibition, education, research |
|
Protected and preserved |
|
Proceeds from sales used to further collection
(must establish a policy) |
|
|
|
|
|
For collections |
|
if capitalized at June 30, 1999 – must remain
capitalized |
|
may apply criteria to all or on a
collection-by-collection basis |
|
Additional disclosures are required if
collections are not capitalized |
|
|
|
|
|
|
|
|
|
Donated collection items added to a
noncapitalized collection |
|
Must report in closing packages at year end to
provide data for footnotes |
|
If issue audited financial statements, required
to recognize donation as revenue and expense |
|
|
|
|
|
|
Exhaustible versus inexhaustible |
|
Exhaustible – record depreciation |
|
Inexhaustible – extraordinarily long useful
lives – depreciation optional |
|
|
|
|
|
|
Missing data |
|
Title issues |
|
Improper classification of assets |
|
Unrecorded retirements, additions &
transfers |
|
Incorrect descriptions, serial number model,
etc. |
|
Adequacy of capital asset systems |
|
|
|
|
|
|
Required for first time for general government
fixed assets |
|
(i.e. currently reported in the general fixed
assets closing package/GFAAG) |
|
Agency systems must be modified by July 1, 2001 |
|
|
|
|
|
|
|
Requires assigning a useful life and charging
cost over that life |
|
OCG policy method - straight-line, full year of expense in year of acquisition |
|
General calculation |
|
Cost (less salvage value) / estimated useful
life = depreciation expense |
|
|
|
|
|
|
Acquisition cost |
|
Year of acquisition |
|
Year of disposition |
|
Estimated useful life |
|
Salvage value |
|
Type of funds used to acquire asset |
|
|
|
|
|
|
|
A Detailed, Auditable Property Record |
|
Specific identification of assets |
|
Historical cost |
|
Year of purchase |
|
An Adequate Software System/Process |
|
Proper segregation of
depreciable/non-depreciable assets |
|
|
|
|
|
Guidance issued by OCG – includes ranges of
common assets* |
|
Specific determination based on: |
|
Asset’s present condition |
|
How the asset is used/maintained |
|
Historical information of similar assets |
|
Expectations of service life |
|
* Review
handout attachment |
|
|
|
|
|
Agencies should review established useful lives
on an annual basis |
|
Changes in useful lives – depreciate remaining
cost over new life |
|
Salvage value – estimated fair value remaining
at end of useful life |
|
Only use salvage value if considered substantial |
|
|
|
|
|
|
|
Required for each capital asset category |
|
Start-of-year balances * |
|
End of year balances * |
|
Capital asset additions, sales, retirements |
|
Current-year depreciation expense |
|
Required to report historical cost and
accumulated depreciation |
|
* Review handout attachment |
|
|
|
|
|
Required to be reported for the first time by
governmental funds |
|
OCG in process of finalizing policies |
|
Capitalization limit will be at least $500,000 |
|
Based on current information, expected to be
significant issue only for SCDOT |
|
|
|
|
|
|
|
|
Effective for the current fiscal year –
June 30, 2001 |
|
Classes of nonexchange transactions |
|
Most significant expected changes are with
grants/entitlements (non-exchange) |
|
|
|
|
Nonexchange transaction – transactions in which
the agency gives (or receives) value without directly receiving (or giving)
something of equal value in return |
|
Exchange transactions – each party to the
transaction receives and gives up something of essentially the same value |
|
|
|
|
Derived tax revenues |
|
Imposed nonexchange transactions |
|
Government mandated nonexchange transactions |
|
Voluntary nonexchange transactions |
|
|
|
|
|
Assessment imposed by governments on exchange
transactions |
|
Examples |
|
personal and corporate income taxes |
|
sales and use taxes |
|
|
|
|
|
Assets |
|
Recognize in period in which the underlying
exchange transaction occurs, or |
|
when the resources are received, whichever
occurs first |
|
|
|
|
|
Revenues |
|
Recognize in period in which the underlying
exchange transaction occurs |
|
Must also be available (governmental and
expendable trust funds) |
|
Revenues received in advance of the underlying
exchange are deferred |
|
|
|
|
|
|
|
Assessments by governments on nongovernmental
entities other than assessments on exchange transactions |
|
Examples |
|
property taxes |
|
fines and penalties |
|
asset seizures |
|
|
|
|
|
Assets |
|
Recognize in period when an enforceable legal
claim arises, or |
|
when the resources are received, whichever is
earlier |
|
|
|
|
|
Revenues |
|
Recognize in period in which the resources are
required to be used, or |
|
when use may begin |
|
Must also be available (governmental and
expendable trust funds) |
|
Amounts billed or received in advance of the
period in which they are to be used are deferred |
|
|
|
|
|
Government at one level provides resources to a
government at another level and requires the funds to be used for a
specific purpose |
|
Examples |
|
federal mandates on state & local
governments |
|
state mandates on local governments |
|
|
|
|
|
Legislative or contractual agreements entered
into willingly by two or more parties |
|
Examples |
|
non-entitlement grant programs |
|
private donations |
|
* Changes
in receivable/deferred revenue calculations for the grants/entitlement
closing packages for 2001. |
|
|
|
|
|
|
|
Recognition is based on |
|
the governmental entity meeting all eligibility requirements |
|
including time requirements |
|
|
|
|
|
|
|
|
Do not affect the timing of recognition of
nonexchange transactions |
|
Must report the net assets as restricted |
|
|
|
|
Technical Literature/ Resources |
|
|
|
|
GASB Statement 34 |
|
AICPA Publication |
|
GASB – Implementation Guide |
|
GFOA “Blue Book” |
|
NACUBO GASB 35 Implementation Guide |
|
|
|
|
|
|
|
Capital Assets |
|
Betsy Lawson |
|
Telephone:
(803) 734-2617 |
|
E-mail:
blawson@cg.state.sc.us |
|
Grants/GASB 33 |
|
Kim Elliott |
|
Telephone:
(803) 734-2621 |
|
E-mail:
kelliott@cg.state.sc.us |
|
|
|
|
|
|
|
STARS Internal/External Indicator – Accounting
Questions |
|
Bryce Wilson |
|
Telephone:
(803) 734-2616 |
|
E-mail:
bwilson@cg.state.sc.us |
|
STARS Internal/External Indicator – Data
Processing Questions/Testing |
|
Scott Houston |
|
Telephone:
(803) 734-2569 |
|
E-mail:
shouston@cg.state.sc.us |
|
|
|
|
|
|
|
http://www.cg.state.sc.us/gasb34/gasb34.htm |
|
New Information |
|
Training for State Agencies |
|
Agency Monitoring Form |
|
Capital Assets – Excel Worksheet |
|
State of SC’s GASB 34 Policies and Procedures |
|
Links to Other Sites Containing GASB 34
Information (includes most of those shown on the next slide) |
|
|
|
|
www.aicpa.org |
|
www.gfoa.org
(Government Finance Officers
Association) |
|
www.nasact.org
(National Association of State Auditors,
Comptrollers and Treasurers) |
|
www.aga.org
(Association of Government Accountants) |
|
Other State Government websites |
|
|
|
|
|
|
|