Knowledge and Insights
Government Accounting Standards Board Response to COVID-19 Pandemic
Similar to the private sector, state and local governments have not been immune to the impacts of the Coronavirus (COVID-19) pandemic. Statewide stay at home orders have limited staffing to essential employees and alternate work schedules, causing many governmental entities to struggle with managing public services while also dealing with the many financial uncertainties the pandemic has presented. With unemployment hitting 14% nationally and projections that it could reach Great Depression levels of 25% in the future, there’s no doubt that these challenges will persist and potentially worsen as time goes on.
To combat this issue, the Governmental Accounting Standards Board (GASB) has set out to provide some relief. Specifically, GASB Statement No. 95 was issued to postpone the effective dates and required implementation of certain Statements and Implementation Guides that were scheduled to become effective starting for years ended June 30, 2020. With these delays, state and local governments will not be burdened with the administrative effort of implementation and can instead focus their efforts on more pressing matters of daily operations. For entities that have already begun of the process of implementing any of these Statements, your efforts will not be wasted. Early implementation is still permitted on each pronouncement included in Statement No. 95.
Below you will find a list of postponed pronouncements and their revised effective dates. Should you have any questions, please don’t hesitate to reach out to us.
Pronouncements postponed by 12 months and their revised effective date:
- Statement No. 83, Certain Asset Retirement Obligations – reporting periods beginning after June 15, 2019
- Statement No. 84, Fiduciary Activities – reporting periods beginning after December 15, 2019
- Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements – reporting periods beginning after June 15, 2019
- Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period – reporting periods beginning after December 15, 2020
- Statement No. 90, Majority Equity Interests – reporting periods beginning after December 15, 2019
- Statement No. 91, Conduit Debt Obligations – reporting periods beginning after December 15, 2021
- Statement No. 92, Omnibus 2020 – government acquisitions occurring in reporting periods beginning after June 15, 2021
- Statement No. 93, Replacement of Interbank Offered Rates – fiscal years beginning after June 15, 2021
- Implementation Guide No. 2017-3, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (and Certain Issues Related to OPEB Plan Reporting) – the first reporting period in which the measurement date of the (collective) net OPEB liability is on or after June 15, 2019
- Implementation Guide No. 2018-1, Implementation Guidance Update—2018 – actuarial valuations as of December 15, 2018
- Implementation Guide No. 2019-1, Implementation Guidance Update—2019 – reporting periods beginning after June 15, 2019
- Implementation Guide No. 2019-2, Fiduciary Activities – reporting periods beginning after June 15, 2020
Pronouncements postponed by 18 months and their revised effective date:
- Statement No. 87, Leases – fiscal years beginning after June 15, 2021
- Implementation Guide No. 2019-3, Leases – fiscal years beginning after June 15, 2021
As a recognized leader in accounting with many years of experience serving state and local governments, Mercadien is ready and able to assist your entity with implementation of these and any other GASB pronouncements or financial reporting needs. To discuss how Mercadien’s Government Services Group can help your entity, please contact me at email@example.com or 609-689-2343.
DISCLAIMER: This advisory resource is for general information purposes only. It does not constitute business or tax advice, and may not be used and relied upon as a substitute for business or tax advice regarding a specific issue or problem. Advice should be obtained from a qualified accountant, tax practitioner or attorney licensed to practice in the jurisdiction where that advice is sought.