GASB Issues Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries.
November 18, 2003
The Governmental Accounting Standards Board (GASB) has published Statement No. 42, Accounting and Financial Reporting for Impairment of Capital Assets and for Insurance Recoveries, that requires governments to report the effects of capital asset impairment in their financial statements. The guidance also enhances comparability of financial statements by requiring all governments to account for insurance recoveries in the same manner.
The Statement requires governments to evaluate major events affecting capital assets to determine whether they are impaired. Such events include physical damage, changes in legal or environmental factors, technological changes or obsolescence, changes in manner or duration of use and construction stoppage.
Impairment will be measured using methods that are designed to isolate the cost of the capital asset’s service capacity that has been rendered unusable by impairment. The Statement requires that government financial statements report service utility losses when they occur rather than over the remaining useful life of the capital asset. The guidance also includes several disclosure requirements that will assist users of financial statements in understanding the nature and impact of impairment of capital assets.
Statement 42 is effective for fiscal years beginning after December 15, 2004. The Statement may be ordered by telephoning the GASB Order Department at 800-748-0659. or visiting the GASB Web site.
- ED Proposes Substantial Expansion of Financial Responsibility Indicators
- Supreme Court Hands Down Two Decisions with Higher Education Implications
- NACUBO Objects to Annual SFA Audits
- 2016 CAO and CBO Collaborations
August 1-2, 2016
- 2016 Planning and Budgeting Forum
September 19-20, 2016
- 2016 Managerial Analysis and Decision Support
November 17-18, 2016
- ON-DEMAND: The CBO's Role in Diversity and Inclusion on Campus
- ON-DEMAND: The Clery Act: Strategic Planning to Mitigate Institutional Risk
- ON-DEMAND: Title IX: Key Issues Surrounding Institutional Compliance
- ON-DEMAND: NACUBO Live! Higher Education Accounting Forum
- ON-DEMAND: Responsibility Center Management: Two Different Perspectives