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GASB 34: Questions and Answers
Q: What is GASB Statement 34?
A: Governmental Accounting Standards Board Statement 34, issued in
June 1999, represents a significant change to traditional government
financial reporting standards. For the first time, accrual accounting
is required for all government activities and all capital assets are
generally required to be depreciated. Additional supplementary
information, such as the Management's Discussion and Analysis (MD&A),
is now required.
Q: Does GASB 34 apply to me?
A: GASB 34 applies to your organization if it is a state or local
governmental entity, including:
- General purpose governments
- Public school districts
- Public benefit corporations
- Public Utilities
- Public hospitals and healthcare providers
- Public college or university (see GASB 35 below)
Q: What is GASB Statement 35?
A: GASB 35 is an amendment of GASB Statement No. 34 (Basic Financial
Statements-and Management's Discussion and Analysis-for Public
Colleges and Universities). Simply stated, it means that GASB 34 also
applies to public colleges and universities.
Q: When does GASB 34 go into effect?
A:
|
Phase |
Total annual revenues in the first fiscal year ending after June
15, 1999 |
Apply GASB 34 for periods beginning |
|
1 |
$100 million or more |
June 15, 2001 |
|
2 |
$10 million, up to $100 million |
June 15, 2002 |
|
3 |
Less than $10 million |
June 15, 2003 |
Q: What are the fixed asset requirements of GASB 34?
A: GASB 34 requires that fixed asset records must be maintained by
public entities in a complete, accurate and detailed manner and that
governments report all capital assets with the consideration of
depreciation, including infrastructure assets and "historical
treasures."
Q: What kinds of assets am I required to report to be in compliance
with GASB 34?
A: Governments should report all capital assets, including
infrastructure assets, in the government-wide statement of net assets
and generally should report depreciation expense in the statement of
activities.
Capital assets are those assets that have a useful life extending
beyond a single reporting period. Capital assets should be recorded at
their original cost (historical cost). Some examples of capital assets
are:
- Land and easements
- Buildings
- Equipment
- Machinery
- Vehicles
- Infrastructure (Such as roads, bridges, sewers, dams, lighting
systems, sidewalk systems and tunnels).
Infrastructure assets that are part of a network
or subsystem of a network are not required to be depreciated as long
as the government manages those assets using an asset management
system that has certain characteristics and the government can
document that the assets are being preserved.
Q: Can fixed asset management software help me meet my GASB 34
requirements?
A: In order to comply with the reporting requirement for capital
assets, you will need complete fixed asset records that include the
acquisition date and cost, asset lives and depreciation method for all
capital asset classifications. You'll also need to depreciate capital
assets and produce detailed fixed asset reports that help you complete
the Statement of Activities required by GASB Statement 34/35.
Note: this Question and Answer sheet is not meant to be an
authoritative guide.
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