DRAFT: FOR GASB NO. 34 IMPLEMENTATION DISCUSSIONS ONLY.
DATE: March 24,
2000
TO:
All County Departments
FROM: Auditor-Controller
SUBJECT: Implemenation of a new accounting standard
for governments
The Government Accounting Standards Board (GASB) has recently adopted
a new accounting standard which will change the way governments prepare
their annual financial statements and report the results of their financial
activity. The purpose of the standard is to provide more understandable
and useful financial reports to a wider range of users. The purpose of
this memo is to notify you of important dates related to this change and
to briefly describe the changes which might affect your department.
The following will briefly describe some of the major changes this new
accounting standard will bring, along with the dates which we are required
to implement the changes:
-
The new standard requires governments to report the costs related to the
construction of infrastructure (roads and bridges, etc.) beginning 7/1/2001.
In past years, we have not been required to report what it costs to construct
roads or bridges.
-
The new standard will require governments to depreciate fixed assets and
infrastructure beginning 7/1/2001. In past years we have only been required
to depreciate assets owned by enterprise funds or internal service funds.
-
The new standard will require governments to retroactively report the historical
cost of existing general infrastructure assets (roads and bridges, etc)
beginning 7/1/2005. We will be required to determine and report the historical
cost of major general infrastructure assets that were acquired from 7/1/1981
to 6/30/2001. In past years we have not been required to report the costs
of these types of assets.
-
In past years we have only been required to report receivables which will
be collected in the first 90 days of the new fiscal year. The new standard
will require governments to report all receivables at year end, regardless
of when the money will actually be received.
-
Many of the activities that we currently report in trust funds will be
reported in another type of fund. The Auditor's office will be reviewing
all of the fund types to determine that we are in compliance with the new
requirements. We will have more details of any required changes at a later
date.
This new accounting standard will require us to make additional changes
to the County's annual financial statements. Additionally, some of the
required changes will affect the way we budget for certain types of transactions
beginning with the preparation of the FY 2001/2002 budget. The Auditor's
Office will be working closely with the County Administrator's office over
the next several months to determine the full impact of the new requirements.
We will continue to communicate how those changes will affect your department
as more information becomes available.
If you have any questions or concern, please call Mark Walsh, Assistant
Auditor-Controller at 3288.