Willdan Group, Inc. · NASDAQ:WLDN
Willdan — LarsonAllen LLP — Session 2 GASB
30 slides from Willdan's investor presentation, Mar 31, 2011
Slide 1: GASB Update – The Next New Accounting Standards
GASB Update – The Next New Accounting Standards PUBLIC FUNDS MANAGEMENT SEMINAR Douglas P. Host, Principal March 31, 2011 ©2010 LarsonAllen LLP
Slide 2: Topics We’ll Address Today
Topics We’ll Address Today: • GASB 51 – Intangibles • GASB 54 – Fund Balance Reporting and Governmental Fund Type Definitions • GASB 60 – Service Concession Arrangements • GASB 61 – The Financial Reporting Entity • GASB 62 – Codification of Pre ‘89 FASB/AICPA ©2011 LarsonAllen LLP 2
Slide 3: GASB Training Video
GASB Training Video ©2011 LarsonAllen LLP
Slide 4: GASB 51 Refresher
GASB 51 Refresher • Intangible Assets: – Lack Physical Substance – Non-Financial (i.e. – not cash or investments) – Useful life GREATER than one year ©2011 LarsonAllen LLP 4
Slide 5: GASB 51 Refresher
GASB 51 Refresher • GASB 51 was issued due to inconsistencies, rather than lack of recording these types of assets • EXAMPLES OF INTANGIBLE ASSETS – Easements – Water Rights – Sewer Processing Capacity Agreements – Timber Rights – Patents – Trademarks – Computer Software ©2011 LarsonAllen LLP 5
Slide 6: GASB 51 Refresher
GASB 51 Refresher • Classify as Part of Capital Assets • Amortize over Estimated Useful Life (EUL) • If no EUL, leave on books at cost • If no cost, obviously no cost on books & no amortization, BUT “Gain on Sale”, if sold • If internally generated, specific conditions (tests) apply (specific object
Slide 7: GASB 51 Refresher
GASB 51 Refresher • Retroactive to June 30, 1980 if Phase I or II – EXCEPT, Optional if indefinite EUL • Prospective only approach is allowed if Phase III Govt (Retro is encouraged, but not req’d) • Effective for years beginning after June 30, 2009 (i.e. 12/31/10 for all calendar year end government
Slide 8: GASB 54 - Change in Fund Balance Reporting
GASB 54 - Change in Fund Balance Reporting • Pre-GASB #54 – focus on when available to be spent • GASB #54 – focus on who sets the spending priorities • Effective date: fiscal years beginning after June 15, 2010 • Fund balance reclassifications require a “restatement” • Only applies to external fina
Slide 9: GASB 54 - Five Categories of Fund Balance
GASB 54 - Five Categories of Fund Balance Non-spendable Prepaids, inventories, long-term receivables, and corpus on any permanent fund Restricted Resource constraints are from outside parties (statute, grantors, bond agreements, etc.) Same definition as GASB #34 definition Committed Required use for
Slide 10: GASB 54 - Key Fund Balance Items
GASB 54 - Key Fund Balance Items • Committed: Board/council action MUST be taken by close of the reporting period (amount can be determined later) • Assigned: Action may be taken before issuance of financial statements • Assigned: Cannot create a negative unassigned • Unassigned: Only category that
Slide 11: GASB 54 - Balance Sheet Presentation
GASB 54 - Balance Sheet Presentation Must summarize/report the five categories on the face of the financial statements (Minimum). - Can report ALL the detail on the face of the Balance Sheet - Can report SOME detail on the face of the Balance Sheet - Disclose the details of fund balances in NOTES to
Slide 12: GASB 54 Note Disclosures
GASB 54 Note Disclosures • Committed fund balance – The highest level of decision-making authority – Formal action needed to establish, modify, or rescind the commitment • Assigned fund balance – The body or official authorized to make assignments – Policy pursuant to which authorization is given •
Slide 13: GASB 54 - Converting Fund Balances
GASB 54 - Converting Fund Balances Step 1: Is it spendable? Step 2: If no (i.e. inventory, prepaids), then = “Non-spendable”. Step 3: If yes, are there constraints imposed by outside parties, if yes, then = “Restricted”. Step 4: If not restricted by outside parties, did the board/council set aside b
Slide 14: GASB #54 Clarification of Fund Types
GASB #54 Clarification of Fund Types ©2011 LarsonAllen LLP 14
Slide 15: GASB 54 - The New General Fund
GASB 54 - The New General Fund • Records and reports all financial resources not recorded and reported in another fund (i.e. capital project, special revenue, and debt service). Basically same definition as pre-GASB #54 but very possible some old special revenue funds will now be reported in the Gen
Slide 16: GASB 54 - Special Revenue Fund Evaluation
GASB 54 - Special Revenue Fund Evaluation • Must have one or more revenue sources (if levied for but the levy collections initially go to General Fund, must show levy funds in ultimate/destination fund (SRF instead of GF). • Determine that a restriction or commitment exists • Revenue sources must be
Slide 17: GASB 54 - Special Revenue Funds: Fund Balances
GASB 54 - Special Revenue Funds: Fund Balances • Generally only 2 categories of fund balance will be reported for specified purposes other than capital related or debt service: - Restricted - Committed Note: Could have negative Unassigned. ©2011 LarsonAllen LLP 17
Slide 18: GASB 54 - Debt Service Fund: Fund Balances
GASB 54 - Debt Service Fund: Fund Balances • Generally only 3 categories of fund balance will be reported for payment of principal and interest: - Restricted - Committed - Assigned ©2011 LarsonAllen LLP 18
Slide 19: GASB 54 - Capital Project Fund: Fund Balances
GASB 54 - Capital Project Fund: Fund Balances • Generally only 3 categories of fund balance will be reported for payment of capital outlays (including streets, roads, equipment, bridges, buildings, etc….): - Restricted - Committed ©2011 LarsonAllen LLP - Assigned 19
Slide 20: GASB #54 Rainy Day (Stabilization) Funds
GASB #54 Rain Day (Stabilization) Funds ©2011 LarsonAllen LLP 20
Slide 21: GASB 54 Says...
GASB 54 Says………. • Economic stabilization is a specific purpose and “…..amounts constrained to stabilization would usually meet that criterion for inclusion in the committed or restricted fund balance classifications of the general fund.” ©2011 LarsonAllen LLP 21
Slide 22: GASB 54 - Requirements for Reporting Rainy Day Funds
GASB 54 - Requirements for Reporting Rainy Day Funds • Must be specific • Could satisfy restricted or committed • Must have a restricted or committed revenue stream to be reported as special revenue fund • Assigned classification is not permitted ©2011 LarsonAllen LLP 22
Slide 23: GASB 60 – Service Concession Arrangements
GASB 60 – Service Concession Arrangements • EFFECTIVE for years beginning AFTER December 15, 2011 (i.e. – Calendar 2012) • DEFINITION – Transferor (govt) conveys to an Operator (Govt or Private) RIGHTS AND OBLIGATIONS to provide services using the Transferor Govt’s capital asset. (e.g. Privatization
Slide 24: GASB 60 – Service Concession Arrangements
GASB 60 – Service Concession Arrangements • IT’S ONLY A SCA if: – Transferor conveys the “right and obligation” in exchange for SIGNIFICANT CONSIDERATION (upfront payment, installment payments, a new facility, or facility improvements) – Operator receives fees from 3rd parties – Transferor Govt has
Slide 25: GASB 60 – Service Concession Arrangements
GASB 60 – Service Concession Arrangements • Transferor Govt reports – the capital asset as normal, including related disclosures, EXCEPT no depreciation if contract requires asset to be returned in its original or enhances condition at end of contract term. – liability (at Present Value) for obligat
Slide 26: GASB 60 – Service Concession Arrangements
GASB 60 – Service Concession Arrangements • Transferee – If Gov’t reports • Intangible Asset (GASB 51) at cost for its “right to access the facility”, amortizing the cost over the term of the contract ©2011 LarsonAllen LLP 26
Slide 27: GASB 61 – Reporting Entity, Amending GASB
GASB 61 – REPORTING ENTITY, Amending GASB 14 & 34 • EFFECTIVE periods beginning after June 15, 2012 (i.e. 2013 for Calendar year end Govt’s) • Some “redefinition” of: – Which organizations should be INCLUDED as component units – Which component units should be BLENDED ©2011 LarsonAllen LLP 27
Slide 28: GASB 61 – Reporting Entity, Amending GASB
GASB 61 – REPORTING ENTITY, Amending GASB 14 & 34 • Fiscal Dependence is NOT ENOUGH to include as Component Unit – must also have FINANCIAL BURDEN/BENEFIT relationship • Blending of component units “tightened up” – Same governing body AND [“benefit/burden” or management of PG also manages component]
Slide 29: GASB 62 – Codification of Pre ‘89 FASB/AICPA Guidance
GASB 62 – Codification of Pre ‘89 FASB/AICPA Guidance • Effective for periods BEGINNING after December 15, 2011 (i.e. 2012 for calendar year Govts) • GASB 62 = 603 paragraphs (per table of contents) of detail information, by subject matter, listing which FASB/AICPA guidance existed prior to NOV 30,
Slide 30: Questions or Comments?
Questions or Comments? Doug Host, Principal dhost@larsonallen.com 218-825-2948 ©2011 LarsonAllen LLP 30