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With a Little Help From the GASB: Implementation Guides

Aug 11, 2023

Sometimes it may feel like the Governmental Accounting Standards Board (GASB) spends 24/7 devising ways to challenge and frustrate governments and auditors with new accounting requirements. However, the GASB devotes much of its time to helping the public understand its requirements and apply them in practice. Those efforts include making over 100 presentations each year at conferences and seminars nationwide; answering technical questions from auditors, government accountants, and other stakeholders; and publishing Implementation Guides containing instructions on applying GASB standards to common situations.

This article answers five questions about GASB Implementation Guides, why they are valuable, and why it is important to be familiar with them.

What are Implementation Guides?

An Implementation Guide is a type of GASB pronouncement that establishes authoritative generally accepted accounting principles (GAAP) regarding how other GASB pronouncements, such as Statements of Governmental Accounting Standards, should be applied to specific facts and circumstances. Unlike some new GASB Statements, Implementation Guides typically do not add to the burden of preparing financial statements. On the contrary, Implementation Guides benefit the public by resolving issues that governments have encountered when trying to implement a GASB Statement or other pronouncement.

Implementation Guides use a question-and-answer format to instruct on how GASB standards apply to real-life situations. A typical Q&A looks like this:
Q- A state pension fund owns a building that is classified as an investment. The pension fund enters into a contract that conveys the right to use the building to a third party.Should the pension fund account for the contract as a lease?
A- No. Because the state pension fund holds the building as an investment, in accordance with paragraph 41 of statement 87, it should not apply the recognition and measurement provisions of that statement.
Source: GASB Implementation Guide 2019-3, Leases (Norwalk, CT: Financial Accounting Foundation)

What types of Implementation Guides does the GASB publish?

The GASB typically publishes a separate Implementation Guide to accompany its most complex Statements, such as for leases (Implementation Guide 2019-3), fiduciary activities (Implementation Guide 2019-1), and other postemployment benefits or OPEB (Implementation Guides 2017-2 and 2017-3). Such “freestanding” Implementation Guides generally become effective simultaneously with the related GASB Statement.

Most GASB Statements are not complex enough to generate a sufficient number of Q&As for their own Implementation Guide. Additionally, practice problems that require implementation guidance may arise well after a Statement has become effective. Q&As in those instances are published in an Implementation Guidance Update (IGU). In addition to new Q&As, IGUs may contain revisions to previous Q&As to make them easier to understand or to reflect the effects of a new GASB Statement. The GASB has published an IGU every year but one since 2016, most recently in June 2023.

The GASB combines all the Q&As from the freestanding Implementation Guides and IGUs, updated to reflect any subsequent revisions, in its Comprehensive Implementation Guide (CIG). The GASB updates the CIG annually, making it a one-stop shop for all Q&As that governments are currently required to follow.

Lastly, the currently effective versions of implementation Q&A are incorporated into the GASB’s Codification of Governmental Accounting and Financial Reporting Standards. The Codification is organized by topic (for example, Section 1300 for reporting capital assets, Sections P20–P24 for employer reporting of pensions, and Sections Po50 and Po51 for reporting by OPEB plans), with the relevant standards in their current version beginning in paragraph .101 and the related Q&As presented in the .700 paragraphs.

You can access the Codification, CIG, and original versions of the Implementation Guides for free online using the Governmental Accounting Research System, which was significantly revamped and improved in early 2023.

Are Implementation Guide Q&As requirements or suggestions?

The guidance in the Implementation Guides is authoritative GAAP; therefore, governments are required to follow that guidance if they have the same facts and circumstances. That fact is not as widely known as it should be. Implementation Guides are Category B authoritative GAAP according to GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. The GASB follows the same due process procedures to develop Implementation Guides as it does for Statements, including exposing a draft for public comment and considering revisions to address the feedback it receives.

Has the GASB published any Q&As recently?

In June 2023, the GASB published an annual IGU as Implementation Guide 2023-1, containing 10 new Q&As and one revised Q&A. As has been the case since Statement 87 on leases was issued in 2017, most of the questions relate to accounting and financial reporting for leases. It also includes guidance about the implementation of Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs), as amended (which governments will be implementing for fiscal years ending June 30, 2023, and later) and Statement No. 100, Accounting Changes and Error Corrections (fiscal years ending June 30, 2024, and later). Governments are required to apply the leases and SBITAs Q&As starting in fiscal years ending June 30, 2024, and later. Earlier application of those Q&As is encouraged, and governments may wish to do so for SBITAs when implementing Statement 96.

For more information about Statements 96 and 100, see the following:

Is help available for understanding and applying GASB Q&As?

CRI’s team of governmental accounting experts are ready to help you understand whether the GASB’s Implementation Guides apply to your government’s facts and circumstances and,  if applicable, how to navigate the guidance. Reach out to CRI now for assistance.

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