Do you have news or updates that WFOA Members would benefit from?

Email: Stacie Tellers, Legislative and Professional Standards Chair


Financial Reporting Model Reexamination Project Field Test: Participants Needed

The Governmental Accounting Standards Board (GASB) is seeking participants for a field test of the standards it will propose in a preliminary views document, Financial Reporting Model Improvements, which is expected to be issued later in September 2018 <Preliminary Views Document>.

The primary objective of the proposed standards is to improve the accounting and financial reporting guidance

A fact sheet describing the benefits of participating in a field test and what participation involves is available on the GASB website. It is anticipated that the field test will be distributed to participating governments in early October 2018. Participants would be expected to complete and return the field test by January 31, 2019.

Governments interested in participating in the Financial Reporting Model Reexamination field test or with questions about the field test should contact GASB senior project manager, Lisa Parker, either by email or by phone at (203) 956-5351.

 Added October 2, 2018; By: Stacie Tellers


GASB Survey: Section 457 Deferred Compensation Plans

The Governmental Accounting Standards Board (GASB) is conducting a survey of financial statement preparers regarding Section 457 deferred compensation plans. The survey is part of a GASB research to evaluate current practice and the effectiveness of existing guidance.

The survey is part of a GASB research effort to evaluate current practice and the effectiveness of existing guidance for Section 457 plans.

(Further information about the research effort can be found on the dedicated page on the GASB website).

The survey should take about 10-20 minutes.

The preparer survey can be accessed by following this link https://bit.ly/2xChomf.

If you would like to review the survey before responding, you can download it in its entirety from the first page of the survey. You also can save your survey answers and return to complete the survey later.

The deadline for completing the survey is Friday, October 19, 2018.

Thank you in advance for your feedback. Your input is vital to the GASB’s efforts to improve accounting and financial reporting.

Added September 28, 2018; By: Stacie Tellers


FREE Training (Webinar) Regarding GASB 87 – Leases

The implementation of GASB Statement 87 – Leases is quickly approaching. Are you ready? Do you need more information?

Crowe – a public accounting, consulting, and technology firm, has put together a 55 minute webinar on this very subject. The webinar provides a summary of the statement and is a great resource to help you get started or to get more information.

This webinar is FREE and available on Crowe’s website: Click here to view the webinar

Added September 28, 2018; By: Stacie Tellers


GASB Clarifies Guidance
on Majority Equity Interests

Norwalk, CT, September 4, 2018—The Governmental Accounting Standards Board (GASB) has issued guidance clarifying the accounting and financial reporting requirements for a state or local government’s majority equity interest in an organization that remains legally separate after acquisition.

A public hospital’s acquisition of a rehabilitation center that remains legally separate after acquisition is an example of the type of transaction the new guidance addresses.

Under Statement No. 90, Majority Equity Interests, a government’s majority equity interest in a legally separate organization should be reported as an investment if that equity interest meets the GASB’s definition of an investment. In many instances, a majority equity interest that meets the definition of an investment should be measured using the equity method.

Statement No. 72, Fair Value Measurement and Application, defines an investment as “a security or other asset that (a) a government holds primarily for the purpose of income or profit and (b) has a present service capacity based solely on its ability to generate cash or to be sold to generate cash.”

For a majority equity interest in a legally separate entity that does not meet the definition of an investment, Statement 90 requires a government to report the legally separate entity as a component unit.

Statement 90 also establishes guidance for remeasuring assets and liabilities of wholly acquired governmental organizations that remain legally separate. That guidance brings the reporting of those acquisitions in line now with existing standards that apply to acquisitions that do not remain legally separate.

Statement 90 is available on the GASB website, www.gasb.org.

<Copied from: GASB Media Advisory 09/04/18>

Added September 5, 2018; By: Stacie Tellers


Security and Exchange Commission (SEC) Approves Amendments to Disclosure Rules

The amendments approved by the SEC to the Municipal Securities Disclosures on Monday, August 20th have been 17 months in the making. The two new triggering events that will require issuers to make a public disclosure within ten (10) business days of the event are:

    •  Any incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material; and
    • Any default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties.

The term “financial obligation” means:

    • (i) any debt obligation (including a lease arrangement that operates as a vehicle to borrow money);
    • (ii) any derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or
    • (iii) any guarantee of (i) or (ii).
      • Note: “financial obligation” does not include the securities in which a final official statement has been provided to the Municipal Securities Rulemaking Board (MRSB)’s Electronic Municipal Market Access (EMMA) that are consistent with Rule 15c2-12. (i.e. the normal bond issuance)

The SEC’s decision to implement the triggering events and amend Rule 15c2-12 is to ensure the timely and public availability of various disclosures regarding municipal securities to the investors in municipal securities and other users of the information via EMMA.

MSRB provides information on all the continuing disclosure requirements (required and voluntary disclosures), training on the EMMA Dataport, deadlines, format requirements, and more. MSRB is working to update their information to incorporate the newest amendments to the disclosure requirements. For access to the MSRB Continuing Disclosures website, click HERE.

For more information regarding continuing disclosure requirements:

Added August 23, 2018; By: Stacie Tellers


City Business License Update – IMPORTANT DATES BELOW

AWC issued an update in regards to the Business license and City B&O tax simplification issues that were passed in EBH 2005 (RCW 35.90) during the 2017 session. The law included the following:

  • Requires cities with business licenses to establish a workgroup to create a model business license with a licensing threshold by July 2018 for adoption by all business license cities by January 1, 2019;
  • Requires all cities with business license to administer their business license through the state’s Business Licensing System (BLS) by 2022 or FileLocal by 2020; and
  • Establishes a task force on local B&O tax service apportionment under RCW 35.102.130 to report to the Legislature by October 2018.

The FINAL model ordinance has been issued, includes a minimum threshold exemption for required licensing.

All Cities with a business license must adopt the model ordinance by January 1, 2019, however any City already partnered with the State’s Business Licensing Service (BLS) for business licensing administration has a deadline of October 17, 2018 due to the 75-day BLS notice required.

Visit AWC’s website for full details: AWC Business License News

Originally published by: AWC’s Victoria Lincoln, Andrew Pittelkau, & Sheila Gall via the AWC Advocacy News page.

Added July 30, 2018; By: Stacie Tellers


FREE – Webinar on Fiduciary Activities (GASB Statement 84)

Did you miss the Thursday July 12, 2018 FREE webinar from KPMG Institutes on Fiduciary Activities Accounting and Reporting Under GASB Statement No. 84?

As one of the speakers said, “This Statement is small (28 paragraphs) yet mighty”. Fiduciary Activities could have a large impact on an entity’s fiduciary reports.

This webinar provides an overview of the accounting and financial reporting requirements for fiduciary activities as defined in GASB Statement No. 84, discusses key concepts and their potential implications to governments, and provides information on identifying implementation considerations and timelines. To watch the 2 hour webcast, click the link below:

GASB 84 – Fiduciary Activities KPMG Webcast
The webcast can also be found on the KPMG Government Institute website by clicking the following link: KPMG Government Institute and then clicking on the “Launch Webcast” link found below the CPE Credit(s) information. (Note: CPE is not available on pre-recorded webcasts).

Published by KPMG Government Institute

Added July 13, 2018; By: Stacie Tellers


U.S. Supreme Court Issues Favorable Decision in Remote Sales Tax Case

On June 21, 2018, the U.S. Supreme Court issued a decision in South Dakota v. Wayfair, Inc., overturning the outdated physical presence standard. This long-anticipated decision clears the way for state and local governments to enforce existing sales and use tax laws on remote sales. For well over two decades, GFOA and other state and local government organizations have pursued a simplified framework of sales and use tax administration to address the ever evolving and growing online retail marketplace. Until this year, the focus has primarily been on Congress where organizations like GFOA have advocated for legislation such as the Marketplace Fairness Act. Without the authority to impose current sales and use tax laws on many remote and online purchases, states and local governments have lost billions of vital revenue for public services every year.

Upon release of the decision, GFOA joined others in the state and local government community and issued a statement. “State and local organizations applaud the U.S. Supreme Court’s decision recognizing that the 1992 Quill ruling put Main Street retailers at a competitive disadvantage to remote sellers and the efforts by states to simplify the sales tax collection process and giving those states remote sales tax collection authority. For 26 years Congress has failed to act and through the efforts of Justice Anthony Kennedy, the federal government has finally recognized the changing nature of commerce and state efforts to simplify the collection process.”

View the Press Release
GFOA remains committed to finding a solution that simplifies and streamlines the collection of sales taxes that makes sense for all stakeholders involved and finally provides a level playing field that treats all businesses alike, whether selling from a brick-and-mortar store or completely online.

Published on GFOA: GFOA Website – U.S. Supreme Court Decision

Added July 3, 2018; By: Stacie Tellers


GASB Establishes New Guidance for Interest Cost
Incurred Before the End of a Construction Period

Norwalk, CT, June 22, 2018—The Governmental Accounting Standards Board (GASB) today released guidance establishing accounting requirements for interest cost incurred before the end of a construction period.

Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, establishes guidance designed to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period. It also simplifies accounting for interest cost incurred before the end of a construction period.

For financial statements prepared using the economic resources measurement focus, interest cost incurred before the end of a construction period should be recognized as an expense in the period in which the cost is incurred. Such interest cost should not be capitalized as part of the historical cost of a capital asset.

For financial statements prepared using the current financial resources measurement focus, interest incurred before the end of a construction period should continue to be recognized as an expenditure on a basis consistent with governmental fund accounting principles.

The full text of Statement 89 is available on the GASB website, www.gasb.org.

Added July 3, 2018; By: Stacie Tellers


Washington State Paid Family and Medical Leave

Beginning January 1, 2020, many Washington State employees will have access to Paid Family and Medical Leave benefits.

The insurance program (administered by the Employment Security Department) allows workers up to 12 weeks of leave (for eligible purposes) while receiving partial wage replacement benefits.

The Employment Security Department Advisory Committee provides continually updates for employers and employees via their website: WA ESD Paid Family and Medical Leave Homepage

Premium assessments for employers and employees will start on January 1, 2019.

Employers can file for approval of a Voluntary Plan; if their paid family and medical leave benefits provide at least the same benefits as the state plan.

How does this affect your entity? Here is an example provided by the ESD:

Question: What premium responsibilities do I have as an employer?

Answer:    A total premium of 0.4 percent up to the social security cap is assessed for each employee. Generally speaking, the employer is responsible for approximately 37 percent of that premium. So if an employee makes $50,000 annually, the total annual assessment would be $200, of which $126.67 would be paid for by the employee, and $73.33 would be paid for by the employer. Employers will be responsible for remitting all premiums collected for Paid Family and Medical Leave to the state. Employers are also required to report hours and wages.

The next Advisory Committee Meeting is scheduled for May 17, 2018 from 10am – 12pm, in Lacey, WA.

The next Rule Making Public Hearing is scheduled for May 23, 2018 at 9am, in Lacey, WA.

For more information: please check out the WA ESD Paid Family and Medical Leave Homepage

By: Stacie Tellers/WFOA Legislation and Professional Standards Committee Chair: tellerss@sao.wa.gov

Added April 25, 2018; By: Stacie Tellers


 

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