GASB Revisits the Financial Reporting Entity

WEBCAST: <a href="Distance_Learning/Applying_Strategic_Financial_Analysis_in_Higher_Education_A_Case_Study.html">Applying Strategic Financial Analysis in Higher Education: A Case Study Wednesday, June 6, 2012 1:00 PM EDT
WEBCAST: <a href="Distance_Learning/Shared_Services_Best_Practices_in_Higher_Education.html">Shared Services: Best Practices in Higher Education Monday, June 18 1:00 pm EDT
WEBCAST: <a href="Distance_Learning/Common_Compliance_Pitfalls_with_Study_Abroad_Programs.html">Common Compliance Pitfalls with Study Abroad Programs Wednesday, June 20, 2012 1:00 PM EDT
ON-DEMAND: <a href="Distance_Learning/HEAFCast_-_The_Higher_Education_Accounting_Forum_Online.html">HEAFCast - The Higher Education Accounting Forum Online
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?

April 26, 2010

The Governmental Accounting Standards Board (GASB) has issued an Exposure Draft (ED) of a proposed Statement, The Financial Reporting Entity, an amendment of GASB Statements No. 14 and No. 34. Provisions of the proposed Statement would be effective in fiscal year 2013 for the vast majority of colleges and universities. Written comments are due to the GASB by June 30, 2010.

The proposed Statement is intended to improve guidance for including, presenting, and disclosing information about component units and equity interest transactions of a financial reporting entity. Of greatest significance to public institutions is that the proposal:

Would amend the criteria for "blending," or the reporting of component units as if they were part of the primary government. The proposal sets out new criteria requiring blending of component units if their debt is expected to be repaid entirely or almost entirely with the resources of the primary government.
Provides additional reporting guidance for blending a component unit if the primary government is a business-type activity that uses a single-column presentation for financial reporting. Public institutions with blended component units would be required to present combining information in the notes to the financial statements.

NACUBO will be providing comments to the GASB and encourages public institutions to submit comments either directly to GASB or to NACUBO for inclusion our industry comment letter. NACUBO's staff resource is Sue Menditto, director, accounting policy.