GASB proposal amends statement dates.

The Governmental Accounting Standards Board released an exposure draft that would amend the effective dates of GASB Statements no. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, no. 11, Measurement Focus and Basis of Accounting - Governmental Fund Operating Statements, and no. 13, Accounting for Operating Leases with Scheduled Rent Increases.

Statement no. 11, issued in May 1990, establishes measurement focus and basis of accounting (MFBA) standards for government trust fund operating statements (and statements of similar funds) effective for statement periods beginning after June 15, 1994. It also provides guidance for balance sheet reporting of general long-term capital debt - liabilities that result from capital asset acquisitions or debt financing of certain nonrecurring projects or activities that have long-term economic benefits.

However, Statement no. 11 does not provide guidance for balance sheet reporting of debt issued to finance operations or deficits (operating debt) or the long-term liabilities that arise from the accrual of government fund expenditures. That guidance was expected to be provided in a subsequent statement on financial reporting.

After issuing Statement no. 11, the GASB considered a variety of financial reporting model issues, including those that were deferred from the MFBA project. Because of the complexity and number of issues involved, the overall reporting model project did not progress as expected.

When the GASB issued a preliminary views document proposing a narrow-scope project to address the balance sheet display issues deferred from Statement no. 11 and other operating statement issues, over 200 responses were received. The majority of respondents preferred that the effective date of Statement no. 11 be delayed until the financial reporting model project is completed.

The new ED calls for deferring Statement no. 11's effective date to periods beginning approximately two years after an implementation standard is issued and modifying the Statement no. 13 reference to Statement no. 11's effective date.

GASB Statement no. 10 says its effective date will be based on a future GASB standard on financial reporting, with the intention that it will be implemented simultaneously with standards resulting from the board's MFBA project under Statement no. 11 and the financial reporting project. The ED would make Statement no. 10's effective date independent of Statement no. 11's effective date.

For information on obtaining copies of the exposure draft, Measurement Focus and Basis of Accounting - Governmental Fund Operating Statements: Amendment of the Effective Dates of GASB Statement no. 11 and Related Statements, call the GASB order department at [phone], ext. 555.