GASB ED Addresses Intangible Assets
December 27, 2006
On December 27, 2006, the GASB issued an Exposure Draft (ED) that would establish accounting and financial reporting guidance for intangible assets. The ED addresses whether certain intangible assets should be considered capital assets for financial reporting purposes. The proposal describes an intangible asset as an asset that lacks physical substance, is nonfinancial in nature, and has an initial useful life extending beyond a single reporting period. Examples of intangible assets include easements, computer software, water rights, timber rights, patents, and trademarks.
The ED would:
• Require that all intangible assets subject to its provisions be classified as capital assets
• Provide authoritative guidance related to the accounting and financial reporting for intangible capital assets
• Provide authoritative guidance that specifically addresses the unique nature of intangible assets, including:
1. requiring that an intangible asset be recognized in the statement of net assets only if it is considered identifiable,
2. establishing a specified-conditions approach to recognizing intangible assets that are internally generated,
3. providing guidance on recognizing internally generated computer software, and
4. establishing guidance specific to intangible assets related to amortization.
As with any standard or proposed standard, the GASB’s objective is to achieve greater consistency in accounting and financial reporting. As a result, the proposal should enhance the comparability of the financial information for intangible assets among governments and public institutions, particularly in the areas of recognition, initial measurement, and amortization.
The requirements of the ED would be effective for financial statements for periods beginning after June 15, 2009 – FY10 for most public institutions. The provisions of this proposed statement generally would be required to be applied retroactively.
A copy of the proposal, " Accounting and Financial Reporting for Intangible Assets, " may be downloaded from the GASB's Web site. The GASB is seeking written comments on the proposal by March 23, 2007. NACUBO encourages public institutions to read and respond to the ED by the comment deadline. NACUBO plans to comment based on input from its Accounting Principles Council but encourages all members to provide insights for contribution to the comment letter.
The board also plans to hold a public hearing during its regular meeting on April 3, 2007, in Norwalk, Connecticut. NACUBO plans to represent higher education at the hearing and will use your thoughts and comments to inform its testimony. Members with feedback on the ED should contact Sue Menditto, director, accounting policy.
- ED Launches New College Scorecard
- NACUBO Members Convey Legislative Priorities on Capitol Hill
- Panelists Detail Complex Campus Sexual Assault Regulations at Hearing
- 2015 Tax Forum
October 25-27, 2015
- WEBCAST: A Financially Sustainable Approach to Innovate Academic Programs
Wednesday, October 21, 2015 1:00PM ET
- ON-DEMAND: Legislative Lunchcast: A 30-Minute Washington Update from NACUBO
- ON-DEMAND: Developing Your Campus Distance Learning Strategy
- ON-DEMAND: VIRTUAL: 2015 Annual Meeting
- ON-DEMAND: NACUBO Live!: CBO Speaks
- ON-DEMAND: A Just-in-Time Webcast to Explain FASB’s NFP Reporting Proposal
- ON-DEMAND: Decoding ED's Cash Management Proposal
- A Guide to College and University Budgeting: Foundations for Institutional Effectiveness, 4th ed. - by Larry Goldstein
- NACUBO's Guide to Unitizing Investment Pools - by Mary S. Wheeler
- Managing and Collecting Student Accounts and Loans - by David R. Glezerman and Dennis DeSantis