GASB Releases Implementation Guide for Comment
12/17/2020
In November, the Governmental Accounting Standards Board (GASB) released a proposed implementation guide comprised of questions and answers designed to clarify or explain guidance in existing GASB standards. The exposure draft, Implementation Guidance Update – 2021, contains new questions and amendments to previously issued implementation guidance.
The exposure draft seeks to provide clarification in the following areas:
- Derivative instruments
- Fiduciary activities
- Leases
- Accounting and financial reporting for nonexchange transactions
Concerning fiduciary activities, public institutions should pay attention to two questions focused on defined contribution plans. The first, Q4.3, explains that when defined contribution plans are not in a trust or equivalent arrangement, the university is a fiduciary for plan assets. As such, although administered by a third party, disbursements to the administrator are not outflows of resources in a government’s financial statements. NACUBO plans to comment and will ask GASB to provide additional information with reference to specific paragraphs and criteria in Statement No. 84, Fiduciary Activities.
The second question, Q4.6, asks if government-selected investments in a defined contribution plan are evidence that the government has the ability to direct the use, exchange, or employment of the assets in the plan. This ability, under paragraph 12 in Statement 84, would indicate government control and a type of fiduciary activity. The answer clarifies that selecting investment options does not constitute control because the government cannot spend, consume, or use the assets for anything other than the provision of benefits to employees.
Comments are due to GASB by February 15, 2021. Public institutions are urged to comment individually or share feedback with NACUBO for inclusion in the higher education comment letter.