Title: How to Implement GASB Statement No. 34: Prepare for the Largest Innovation Ever in State and Local Government Financial Reporting
Abstract: Outside the District of Columbia, changes don't come much bigger than this' New financial reporting requirements from the Governmental Accounting Standards Board (GASB) mean state local governments must revamp both the form substance of their financial reports. new model requires government-wide statements containing information--not previously collected--that will make it easier for financial statement users to measure operational accountability by accounting for activities as business enterprises do. In the statement of activities, for example, governments will have to capitalize--not expense--the purchase of fixed assets. In addition, the financial statements' format will reflect the net cost of government services, such as providing for public safety education. For the tens of thousands of governments that have to comply with no. 34, Basic Financial Statements--and Management's Discussion Analysis--for State Local Governments--and for the auditors helping them interpret implement it--this is a major undertaking. (Statement no. 34 was issued in June 1999. See JofA, Official Releases, Oct. 99, page 112.) When they have implemented the statement, however, these governments' financial reports will provide more data than ever before, much of it in new government-wide formats. required implementation date for larger governments is for fiscal years beginning after June 15, 2001 (see GASB 34 Implementation Schedule page 72). city of Alexandria, Virginia, however, decided to implement two years early. Its financial statements are presented in exhibit 1, Statement of Net Assets, page 77, exhibit 2, Statement of Activities, page 78. This article offers suggestions advice on how to implement the new statement. It recounts Alexandria's experience discusses possible concerns from the viewpoint of the state of Alaska--which expects to implement the standard in 2002--and of an Oklahoma City CPA firm that audits the financial statements of state local governments is assisting a number of them in preparing their financial reports under no. To help governments implement no. 34, issued no. 37, Basic Financial Statements--and Management's Discussion Analysis--for State Local Governments: Omnibus, no. 38, Certain Financial Note Disclosures in June 2001 (see Official Releases, page 127). should review the following related statements as well: * no. 36, Recipient Reporting for Certain Shared Nonexchange Revenues (April 2000). * no. 35, Basic Financial Statements--and Management's Discussion Analysis--for Public Colleges Universities (November 1999). * no. 33, Accounting Financial Reporting for Nonexchange Transactions (December 1998). GET A GOOD START need to quickly identify issues that could hinder a smooth implementation of the requirements. One determination they should make early is whether they have enough skilled staff or will need outside assistance in preparing their financial statements, says Frank Crawford, CPA, a partner in the Oklahoma City auditing firm of Crawford & Associates. Those beginning to plan for implementation will be glad to hear the statement's provisions won't have much impact on accounting software systems. The effect is minimal, Crawford says. Governments still will maintain their fund accounting do adjustments at yearend to convert to the external financial reporting requirements of no. 34. But there are other areas to be concerned about. Kim Garnero, CPA, director of the division of finance in Alaska's department of administration, says her top concern is staffing. We don't have people to dedicate to this, she says, and staff turnover is a constant worry. So, we've been training with a consultant who reviewed our previous financial statements designed an implementation plan that focused on those statement provisions that pertain to us. …
Publication Year: 2001
Publication Date: 2001-11-01
Language: en
Type: article
Access and Citation
Cited By Count: 4
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot