Summary of Currently Applicable GASB Statements GASB 60 ...

Summary of Currently Applicable GASB Statements
GASB 60‐Service Concession Arrangements (SCAs)
Purpose of this Statement is to establish reporting standards for SCAs which is a type of public‐private or public‐public
partnership, and to differentiate between SCAs and other contractual service or management agreements with third
parties.
An SCA is an arrangement between a government (transferor, one of our institutions) and a third party
(operator) in which all of the following criteria are met:
a. The institution conveys to the operator the right and obligation to provide public services through
the use and operation of a capital asset in exchange for significant consideration. Significant
consideration could be in the form of up‐front payments, installment payments, a new facility or
improvements to existing facility.
b. The operator collects and is compensated by fees from third parties.
c. The institution has the ability to modify or approve what services the operator is required to
provide, to whom services are provided, and prices or rates that can be charged for those services.
d. The institution is entitled to significant residual interest in the service utility of the asset at the end
of the arrangement.
Summary Comments: This Statement will likely have some effect on our schools. Generally facilities constructed by
third parties are handled by lease agreements and would not be subject to GASB 60. However, we have many
agreements with third parties related to dining facilities and bookstores for which our schools receive up‐front
payments from operators to access facilities. We also have a few agreements related to dormitories where the third
party constructed and operates the facility on the institutions property with a ground lease in effect which most likely
would be subject to GASB 60. Our schools will have to review these agreements to determine if all four criteria are
met. The system office is suggesting that “significant consideration” be defined at 3% of the institution’s net assets.
If this is acceptable to Department of Audits and State Accounting Office, only SCAs meeting all four criteria after
applying 3% as significant consideration would be subject to GASB 60 reporting.
GASB 61 – Financial Reporting Entity: Omnibus
Adds clarity to GASB 14 for component unit reporting by:
Changing Fiscal dependency criteria to include benefit, burden relationships
Clarifies “misleading to exclude criteria” when fiscal dependency criteria does not apply
Clarifies determination of Major component units
Blending criteria changed, specifically related to debt outstanding that is expected to be repaid from
resources of the primary government.
Blending criteria also modified if primary government is BTA.
Primary Government must report equity interest in a discretely presented component unit as asset.
Summary Comments: It appears that GASB 61 will have limited effect on procedures at USG. Some decisions will have
to be made by Foundations in conjunction with their independent auditors to determine effects on component unit
reporting, specifically related to blending when debt is outstanding. This GASB would appear to have more effect at
the SAO level where the statewide component unit criteria are applied to various college and university foundations.

GASB 62‐Incorporate pre November 30, 1989, FASB Statements,
APB Board Opinions and AICPA Research Bulletins into GASB’s
authoritative literature
GASB 62, which is effective for fiscal year 2013, was necessary because FASB was adopting a new codification that would
make original pre November 30, 1989 FASB pronouncements no authoritative. Since the GASB had required application
of these specific FASB pronouncements in GASB 20 and GASB 34, GASB needed to officially incorporate these standards
into GASB literature for them to remain authoritative GAAP.
The following guidance has been brought into GASB:
Applicability to our Institutions High Limited N/A
Capitalization of Interest from FASB 34 applies to business type
activities and enterprise funds
Revenues for exchange transactions and revenue recognition criteria when
right to exchange exists
State of Net assets classification (ARB 43, APB Opinion 12, FASB 6)
Special and Extraordinary Items (APB 30)
Comparative Financial Statements‐(ARB 43)‐we don’t report in this format.
Related Parties‐(FASB 57)‐Our general note disclosure should be sufficient
because of way foundations are defined for CAFR
Prior Period Adjustments‐(FASB 16 and APB 9) Generally error corrections
that require restate based on materiality‐no changes from our current
approach
Accounting Changes – (APB 20) Generally changes in accounting principles
and reporting entity require restatement. Changes in estimates are
reported as part of current year operations. Same as our current approach.
Disclosure of Accounting Policies‐Our notes already describes accounting
principles followed and has adequate disclosures necessary to be GAAP
compliant.
Contingencies –(FASB 5) Reporting gain and loss contingencies
Construction type contracts for governments engaged in contracting
operations‐We are not in this business.
Extinguishment of Debt‐(APB 26 and FASB 76). Would not apply to us since
we do not issue debt.
Troubled Debt Restructuring (FASB 15) ‐ Guidelines for reporting for debtor
and creditor for troubled debt restructuring. This should not apply to us.
Foreign Currency Transactions‐ Gain or loss recognition criteria based on
transaction settlement dates. This should have very limited, if any, effect
on us for financial reporting because we generally don’t have any
transactions that produce A/R or A/P on our financial statements.
Interest Cost Imputations‐ Notes given or received for services that do not
have stated interest rate or interest rate is not fair compensation,
additional interest must be imputed and reported as a premium or discount
and amortized over life of note. It is highly unlikely that our schools would
have any transactions of this nature.
Inventories (ARB 43) –Pricing inventories of business type activities.
Provides rules for valuing inventories on cost or lower of cost or market

Applicability to our Institutions High Limited N/A
basis consistent with what our schools are currently doing.
Investments in Common Stock‐Accounting use cost vs. equity methods. No
change in application vs. current practice.
Leases (FASB 13, 22, 98 and FASB Interpretations 23, 26 and 27) ‐
Establishes standards for lessor and lessee reporting. Applicable to capital
and operating leases. This is consistent with methodology that our schools
already use.
Nonmonetary Transactions‐Generally relates to nonmonetary exchanges of
assets or liabilities between a government and another entity (does not
include transactions between reporting units in the same reporting entity
which is covered in GASB 48). It is unlikely that our institutions would have
transactions of this nature.
Sales of Real Estate (FASB 66)‐Recognizing gain or loss on sale of real estate
based on whether sales are retail land sales or “other than retail land”
sales. Our institutions are not in the business of buying or selling real
estate, so this would have very limited applicability.
Applicability to our institutions
High Limited N/A
Real Estate Projects‐(FASB 67) ‐ Reporting Standards for costs associated
with real estate projects developed or acquired for sale or rental. It does
not apply to projects developed for the government’s own operations or to
projects with lease rules apply. This would not be applicable for our schools
because our projects are handled under lease rules.
Broadcasters (FASB 63) ‐ Standards for reporting broadcast license
agreements and bartering transactions. This would have very limited
applicability to USG institutions. Those with radio and/or television stations
would be subject to reporting for these agreements.
Cable Television Systems‐(FASB 51) ‐ standards for government entities
operating cable television systems. Should not apply to USG institutions.
Insurance Entities other than Risk Pools‐(FASB 60) ‐ Establishes standards
for short‐term insurance contracts written underwritten by insurance
entities. USG institutions are not insurance entities.
Lending Activities‐(FASB 91) ‐ Establishes standards for accounting and
reporting of nonrefundable fees associated with lending activities and loan
purchases. This should not apply to USG institutions.
Mortgage Banking Activities (FASB 65)‐standards for mortgage loan
activities held for sale. This would not be applicable for our institutions.
Regulated Operations (FASB 71, 90 and 101) Standard applies to Business
Type Activities that have regulated operations. Our institutions do not have
regulated operations subject to rate actions from a regulator, so this section
would not apply.
Summary Comments: This is a voluminous GASB codification, but it really shouldn’t change anything that we are
already doing. The main point of this GASB statement is to incorporate FASB and AICPA guidance into existing GASB
literature. This wouldn’t create new reporting standards because it would only change the hierarchical makeup for
applying GAAP. As stated, this GASB statement should not change how our institutions report financials. It may have
some effect on related party/component unit reporting for the State Accounting Office.

GASB 63 ‐ Financial Reporting for Deferred Outflows, Deferred
Outflows and Net Position
This Statement, which is effective for fiscal year 2013, establishes standards for reporting deferred inflows, outflows and
net position consistent based on guidance provided in GASB Concept Statement No. 4:
Deferred outflows‐consumption of Net Assets applicable to future reporting period
Deferred inflow‐acquisition of Net Assets applicable to a future period
Net Position‐residual of all other elements in financial statements which is presented as (Assets + deferred
inflows ‐ liabilities ‐ deferred outflows)
Summary Comments: This Statement effectively changes the presentation of the balance sheet for fiscal year ended
June 30, 2013. The Statement of Net Assets will become the Statement of Net Position, with Deferred Outflows
reported below assets but before liabilities and Deferred Inflows reported after liabilities but before Net Position.
Currently, the reporting of deferred inflows and outflows only apply to transactions addressed in two GASB
pronouncements, Statement 53 concerning derivatives and Statement 60 on concession arrangements. GASB 65,
which will be discussed later, provides additional guidance on other transactions subject to this format.
GASB 64‐Application of Hedge Accounting Termination
Provisions
This Statement was effective in fiscal year 2012. It clarifies existing requirements for the termination of hedge
accounting first addressed in GASB 53.
Summary Comments: This Statement should not affect USG institution’s reporting because our schools are not
allowed to invest in derivative type instruments. It may have some effect on Foundation reporting and the schools
would need to work with the foundation accountants and auditors to ensure proper reporting.

GASB 65‐Items Previously Reported as Liabilities
This Statement, which is effective in fiscal year 2014, builds on the reporting requirements for deferred outflows and
deferred inflows that were discussed in GASB Statement 63 above and GASB Concept Statement No. 4.
This statement will require that certain items previously reported as assets or liabilities now be classified as deferred
inflows or outflows.
Key components of GASB Concept Statement 4 affecting classification of transactions:
Assets are considered to be resources with present service capacity that the government presently controls.
Liabilities are present obligations to sacrifice resources that the government has little or no discretion to avoid.
Deferred outflows of resources are a consumption of assets applicable to a future period.
Deferred inflows of resources are the acquisition of resources that are applicable to future periods.
Items currently reported as assets that will continue to be reported as assets based on GASB 65 because they
meet the present service capacity and governmental control and items currently reported as liabilities because
they are present obligations that government has little or no ability to avoid are:
Assets
Prepayments
Resources advanced to another government that
are considered a Government mandated nonexchange
transactions (normally grants where
provider government requires lower level
government to undertake some mandated action)
or voluntary non‐exchange transactions (grants or
donations which are the result of contractual
agreements) where eligibility requirements, other
than time requirements, have not been met.
The purchase of future revenues from a
government outside the financial reporting entity.
Example would be sales of receivables.
Initial subscriber costs for cable television systems.
Capitalized costs related to regulated activities.
Liabilities
Derived Tax non‐exchange revenues (income tax,
sales tax) received in advance.
Resources received in advance for government
mandated non‐exchange transaction or a
voluntary non‐exchange transaction when
eligibility requirements other than time
requirements have not been met. Liability side of
item 2 listed under assets.
Resources received in advance of exchange
transactions.
Excess of initial hook up revenues over direct
selling costs for cable television systems.
Premium revenues for insurance entities and
public entity risk pools.
Commitment fees related to acquiring loans.
Fees related to guaranteeing mortgages.
Fees received for arranging a commitment
between investor and borrower.

GASB Board had determined that the following transactions should be reported as deferred inflows or deferred
outflows:
Deferred Outflows
Resources advanced to another
government for government mandated
non exchange transactions or voluntary
non‐exchange transactions when time
requirements are the only eligibility
requirement that have not been met.
GASB decided this relates to future
periods because provider no longer
maintains control of the present service
capacity. Examples are “reimbursement
type” or “expenditure driven grants”.
Deferred debit amounts resulting from
debt refunding
Purchase of future revenues within the
same reporting entity
Losses resulting from a sale‐leaseback
transaction represent a consumption of
resources related to a future period
Loan origination costs incurred prior to
sale for mortgages held for resale should
be deferred if sale occurs in future period
Resources received in advance from another
government for government mandated non
exchange transactions or voluntary non‐exchange
transactions when time requirements are the
only eligibility requirement that have not been
met. GASB determined this relates to future
period because recipient doesn’t have a present
obligation to sacrifice resources. Examples are
“reimbursement type” or “expenditure driven
grants”.
Deferred credit amounts resulting from debt
refunding
Proceeds from the sale of future revenues
Gains resulting from a sale‐leaseback transaction
represent acquisition of net assets related to a
future period
Loan origination fees received prior to sale for
mortgages held for resale should be deferred if
sale occurs in future period
Resources received in advance related to
imposed non‐exchange transactions. An example
would be property taxes imposed on individuals
and non‐governmental entities.
Receipt of payment for points on loan transaction
that reduces interest rate or future interest is
deferred inflow that should be recognized over
duration of loan
Regulated operations which receive resources
from rate‐payers based on current rates for
services that will be provided in the future
Gains or other reductions of net allowable costs
for regulated business type activities. An
example would be early extinguishment of debt
for an amount less than net carrying value for
regulated business type activity
Resources received in governmental funds that
do not meet revenue recognition criteria for
governmental fund reporting
Deferred Inflows
Summary Comments: This Statement does not go into effect until fiscal year ended June 30, 2014, but
it will likely have a significant impact on how we report certain activity on the balance sheet and the
timing as to when that activity is reported on the income statement. This GASB clarifies and expands
on reporting activity previously discussed is GASB 63.