GASB Update Presented by: Debbie Harper Ryan Domino
Housekeeping items • GASB series • We are offering registration for both CPE or no CPE • You will get a pop ups that will need your response for CPE credit. (70%) • You can send us questions at anytime and we will either respond directly or set-up a Q&A series that will be available www. lslcpas .com
Debbie Harper, Partner • 19+ years with LSL • Technical Partner • Specialize in Government • Deborah.harper@lslcpas.com www. lslcpas .com
Ryan Domino, Manager • 7+ years with LSL • GFOA Technical Reviewer • AICPA Advanced Single Audit Certified • Ryan.domino@lslcpas.com www. lslcpas .com
• June 30, 2020 Fiscal Year – COVID-19 - POSTPONED • June 30, 2021 Fiscal Year – GASB 84 – Fiduciary Activities – GASB 90 – Majority Equity Interest • June 30, 2022 Fiscal Year – GASB 87 - Leases – GASB 89 - Accounting for interest cost incurred before the end of a construction period – GASB 92 – Omnibus 2020 – GASB 93 – Replacement of Interbank Offered Rates www. lslcpas .com
ITEMS TO HAVE IN PLACE BY JULY 1, 2020 FOR JUNE 30, 2021 IMPLEMENTATION
GASB 84 FIDUCIARY ACTIVITIES www. lslcpas .com
Fiduciary Activities • Income Statement Activity • Break out Revenues (Additions) • Break out Expenses (Deductions) • This activity needs to be for the entire year www. lslcpas .com
New Fiduciary Activity Categories: • Pension (and Other Employee Benefits) Trust Funds • Investment Trust Funds • Private-Purpose Trust Funds • Custodial Funds – Break out – Investment Funds not in Trust www. lslcpas .com
All Fiduciary Funds - Statements • Statement of Net Position – Balance Sheet • Statement of Changes in Fiduciary Net Position – Income Statement www. lslcpas .com
Identifying Fiduciary Activities • Fiduciary Component Units – Meets Statement 14 as amended as a component unit AND is one of the following arrangements: • An irrevocable trust of a pension plan • An irrevocable trust of an OPEB plan • Non employer assets accumulated for a pension plan • Non employer assets accumulated for an OPEB plan www. lslcpas .com
Component Unit • Generally, pension and OPEB trusts are legally separate entities • Financially Accountable – appoint voting majority and able to impose will/receive a financial benefit • Financial Burden – legally obligated or assumed the obligation to make contributions to pension or OPEB plans • Fiscal Dependency – PG approves budget, rates, bond issuance, etc. www. lslcpas .com
Does your component unit fall under Fiduciary Activities? (3 options) • Fiduciary Component Units – Assets are: • Administered through a trust agreement or equivalent arrangement in which the government itself is not a beneficiary, • Dedicated to providing benefits to recipients in accordance with the benefit terms, and • Legally protected from the creditors of the government www. lslcpas .com
Does your component unit fall under Fiduciary Activities? (3 options) • Fiduciary Component Units – Assets are • for the benefit of individuals, and • the government does not have administrative involvement with the assets or direct financial involvement with the assets. • In addition, the assets are not derived from the government’s provision of goods or services to those individuals www. lslcpas .com
So what is considered Administrative Involvement or Direct Financial Involvement? • Administrative involvement – If government monitors compliance with the requirements of the activity that are established by the government or by a resource provider that does not receive the direct benefits of the activity. – If government determines eligible expenditures that are established by the government or by a resource provider that does not receive the direct benefits of the activity – If government has the ability to exercise discretion in how assets are allocated. www. lslcpas .com
So what is considered Administrative Involvement or Direct Financial Involvement? • Direct Financial Involvement – If government provides matching resources for the activities www. lslcpas .com
Does your component unit fall under Fiduciary Activities? (3 options) • Fiduciary Component Units – Assets are • for the benefit of organizations or other governments that are not part of the financial reporting entity. • In addition, the assets are not derived from the government’s provision of goods or services to those organizations or other governments. www. lslcpas .com
Identifying Fiduciary Activities • Pension and OPEB Arrangements that are NOT component units and government controls assets – A pension plan that is administered through an irrevocable trust (see paragraph 3 of Statement 67) – An OPEB plan that is administered through an irrevocable trust (see paragraph 3 of Statement 74) – A circumstance in which assets from entities that are NOT part of the reporting entity are accumulated for pensions (see paragraph 116 of Statement 73) – A circumstance in which assets from entities that are NOT part of the reporting entity are accumulated for OPEB (see paragraph 59 of Statement 74 www. lslcpas .com
Control of Assets not considered in determining component unit is a fiduciary component unit • Control of Assets – If the government holds the assets or – Has the ability to direct the use, exchange, or employment of the assets in a manner that provides benefits to the specified or intended recipients. – Restrictions from legal or other external restraints that stipulate the assets can be used only for a specific purpose do not negate a government’s control of the assets. www. lslcpas .com
Identifying Fiduciary Activities • Other Fiduciary Activities if all three of the following: 1) The government has control over the assets 2) Those assets are NOT derived either: • Solely from the government’s own-source revenues • From the government mandated/voluntary nonexchange transactions (exception of pass-through grants) 3) Assets associated with activity are at lease one of the following: I. In a trust legally protected, dedicated for recipients within the terms II. Assets benefit individuals with no government involvement III.Assets benefit an organization or other outside government www. lslcpas .com
How to Report identified Fiduciary Activities • Pension (and other employee benefit) trust funds – Pension plans and OPEB plans that are administered through irrevocable trusts (see par. 3 of Statement 67 and/or 74) – Other employee benefit plans for which (1) resources are held in a trust fund AND (2) contributions to the trust and earnings on those contributions are irrevocable. www. lslcpas .com
Combine here, break‐out in back Look for additional breakdown of investments Break‐out here www. lslcpas .com
Common California Plans for Pension and OPEB • Pension – Multiple Agent Plans and Cost Sharing Plans – CalPERS, PARS or County Plans (OCERS, SBCERA, SDCERA, etc.) – Assets investment are shared for investment purposes only and benefits are separate for each employer – Asset investments are shared for investment purposes AND benefits are shared among employers • Excluded from Fiduciary Fund Statements – Lack of Voting Majority – Lack of imposition of will – Lack of Control of assets www. lslcpas .com
Common California Plans for Pension and OPEB • Pension – Single Employer Plan – Your Own Pension Plan – Assets investment are NOT shared for investment purposes AND benefits are not shared • Pension Trust Fund Fiduciary Fund Statements www. lslcpas .com
Common California Plans for Pension and OPEB • OPEB – Multiple Agent Plans – CalPERS - CERBT, PARS – Assets investment are shared for investment purposes only and benefits are separate for each employer • Excluded from Fiduciary Fund Statements – Lack of imposition of will – Lack of Control of assets www. lslcpas .com
Common California Plans for Pension and OPEB • OPEB – Single Employer Plan (Stand-Alone Plan) – Your Own OPEB Plan – Assets investment are NOT shared for investment purposes AND benefits are not shared • OPEB Trust Fund Fiduciary Fund Statements www. lslcpas .com
How to Report identified Fiduciary Activities • Investment trust funds – Used to report fiduciary activities from the external portion of investment pools and individual investment accounts that are held in a trust when government is not a beneficiary and assets are dedicated to providing benefits to recipients in accordance with benefit terms where assets are legally protected from government creditors www. lslcpas .com
www. lslcpas .com
How to Report identified Fiduciary Activities • Private-purpose trust funds – Used to report all fiduciary activities that are NOT • pension (and other employee benefit) trust funds or • investment trust funds AND – Held in a trust – Government is not a beneficiary – Assets provide benefits to recipients in accordance with benefit terms where assets are legally protected from government creditors. www. lslcpas .com
www. lslcpas .com
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