Copyright© 2001 by School Services of California, Inc.
Volume 14 For Publication Date: December 21, 2001 No. 26
Under GASB 34, What Happens to Fund Accounting?
Q. I have heard about the new financial statements now required by Governmental Accounting Standards Board Statement No. 34 (GASB 34). How does GASB 34 affect the fund accounting that we have always done?
A. Local Educational Agencies (LEAs) will continue to use fund accounting as in the past. However, LEAs will be required to capture additional data to comply with the new reporting model, GASB 34. The same applies for Governmental Accounting Standards Board Statement No. 35 (GASB 35), which encompasses public colleges and universities.
For example, information relating to the depreciation of capital assets over a period of time would be necessary for accurate data to be included in the financial statements. In order to determine the depreciation, at a minimum the following information is necessary:
—Sheila G. Bua and Michele Huntoon, CPAThe statement does not specifically designate asset lives. However, you should determine via policies and procedures asset lives that are applicable to your specific district. An asset in one LEA may have a longer or shorter life span than in another LEA. There are resources available to use as a guideline, including the Implementation Recommendations for School Districts, published by the Association of School Business Officials (ASBO). The ASBO publication can be ordered online at www.asbointl.org.
Once your district’s books are closed for the year, your fund statements will be a starting point for any adjustments and reporting requirements necessary to comply with GASB 34/35. For example, the liability for a capital lease currently is reflected in the General Long-term Debt Account Group, not shown as a liability in the General Fund. Under the new reporting requirements of GASB 34/35, all liabilities will be included in the Government-Wide statements on the full accrual basis of accounting. However, it is important to note that the implementation of GASB 34/35 will not result in any changes in your day-to-day fund accounting practices.