The widespread effects of coronavirus are rippling through even the implementation dates of accounting standards set by the Governmental Accounting Standards Board.
The GASB guidance is important to cities and counties that use GAAP accounting, but the dramatic drop in state and local revenues caused by the crisis has been compounded by the need for additional spending in healthcare and emergency services.
The National League of Cities last week sent a letter to the Trump administration and congressional leaders requesting a temporary suspension of all federal rulemaking.
GASB’s directors will consider postponing the effective dates of eight statements and five implementation guides at its April 14 meeting, which will be held by teleconference.
“The proposal tentatively has identified provisions that became effective or will become effective for reporting periods beginning after June 15, 2018, through Statement No. 92, Omnibus 2020, and Implementation Guide No. 2019-3, Leases,” GASB said.
Last month GASB approved Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, which includes an extended effective date of reporting periods beginning after June 15, 2022, one year later than had been originally proposed.
The date for releasing the final text of the new P3 guidance is uncertain. It previously had been expected this week.
GASB’s existing guidance on P3s dates back to November 2010 in Statement 60 which was issued when only a few state and local governments had undertaken P3s.
Under an original P3, a private partner would operate and maintain the infrastructure, collect revenues such as tolls and handle the debt payments such as a bond offering.
But in the near decade since, P3s have become far more common nationwide and diversified in how they function.
Newer P3s may have the government entity collecting the revenue or require that the private operator turn over the revenue to the government before a payment is made back to the private partner. Those variations wouldn’t meet GASB’s current definition of a service concession arrangement. But in terms of economic substance all of them are very similar transactions.
Two years ago GASB released updated guidance on government leases in Statement 87.
In addition to moving ahead with the final guidance on P3s, GASB last week published its final guidance on the transition from Libor, also known as the London Interbank Offered Rate.
That new guidance contained in Statement 93 applies to reporting periods beginning after June 15.
The guidance provides accounting and financial reporting rules to help state and local governments in the transition away from existing interbank offered rates to other reference rates.
Statement 93 provides exceptions for certain hedging derivative instruments to the hedge accounting termination provisions when an IBOR is replaced as the reference rate of the hedging derivative instrument’s variable payment.
GASB’s full list of delays is expected to be announced April 16 in an exposure draft, although the board added in a press statement that it will continue to encourage early implementation by the original effective dates.
Meanwhile, GASB said Monday it has temporarily suspended planned stakeholder research activities, such as interviews and surveys, until at least June 1 for pre-agenda research and at least July 1 for post-implementation reviews.
GASB also said it will soon be posting a toolbox on its website to assist governments and other stakeholders to identify the guidance that they can draw on to address pandemic-related issues.
Stakeholders in the meantime should submit any questions they have to GASB’s website link for its technical inquiry service where those questions will be directly addressed by its staff.
