"The Exposure Draft essentially fine-tunes a few of the provisions of Statement 34," said Ken Schermann, GASB senior project manager. "All of the proposed changes are consistent with the Board's original intentions when the Statement was written.''

Statement 34 was developed to make annual reports easier to understand and more useful to those who use governmental financial information to make decisions.

The Exposure Draft, entitled Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments Omnibus, proposes changes intended to clarify some provisions of Statement 34 and to modify them for more consistent application, according to the seven-member board.
Among the provisions clarified by the draft are: requirements for the contents of management's discussion and analysis; the financial reporting effect of changing to the modified approach for reporting infrastructure; classification of program revenues, including fines and forfeitures; and major fund criteria.

Other changes include the elimination of the requirement to capitalize construction period interest for governmental activities, and changing the minimum level of detail required for business-type activities in the statement of activities from segments to different identifiable activities. The draft also includes proposed amendments to GASB Statement No. 21, Accounting for Escheat Property, that are necessary because of the changes to the fiduciary fund structure required by Statement 34.

The Exposure Draft provisions would be simultaneously implemented with Statement 34. For governments that implemented Statement 34 prior to the issuance of this statement, the requirements would be effective for financial statements for periods beginning after June 15, 2000, GASB said.

Written comments about the proposals in the Exposure Draft should be submitted by March 16, 2001. The Exposure Draft is posted online at www.gasb.org.

-- SmartPros News Staff

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