GASB Issues Statement No. 52, Land and Other Real Estate Held as Investments by Endowments

ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Budget_Models_and_Process_Challenges_Facing_Institutions_Today.html">Budget Models and Process: Challenges Facing Institutions Today
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Hiring_for_a_Global_Campus—Why_a_Textbook_Approach_Will_Not_Work.html">Hiring for a Global Campus—Why a Textbook Approach Will Not Work
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Higher_Education_Analytics_and_Data_Driven_Decisions.html">Higher Education Analytics and Data Driven Decisions
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Common_Compliance_Pitfalls_with_Study_Abroad_Programs.html">Common Compliance Pitfalls with Study Abroad Programs
ON-DEMAND: <a href="Distance_Learning/On-Demand_Webcasts/OD_Net_Tuition_Revenue_Price_and_Enrollment_How_Can_you_Achieve_Balance.html">Net Tuition Revenue, Price and Enrollment: How Can you Achieve Balance?

November 21, 2007

On November 21, the Governmental Accounting Standards Board (GASB) issued Statement No. 52, Land and Other Real Estate Held as Investments by Endowments. The statement requires public institutions with land and other real estate in their endowment portfolios to report those investments at fair value.

Prior to the issuance of Statement 52, government and higher education endowments were required to report land and other real estate held as investments at historical cost. Because entities that perform investment functions similar to endowments--including pension plans, other post employment benefit (OPEB) plans, external investment pools, and Internal Revenue Code Section 457 deferred compensation plans--have been required to report their land and real estate investments at fair value, the new standard creates consistency in reporting among similar entities that exist to invest resources for the purpose of generating income.

To help users of financial statements better evaluate an endowment's investment decisions and performance, Statement 52 requires governments to report the changes in fair value as investment income. It also requires them to disclose the methods and significant assumptions employed to determine fair value, and to provide other information that they currently present for other investments reported at fair value.

NACUBO Contact: Sue Menditto, director, accounting policy