Recent releases of professional standards

This listing of releases will be provided regularly in the Statement as a member service. The list is to alert members to recent professional standards issues and is not intended to cover issues fully. Consult the actual standard for complete information.

Financial Accounting Standards Board

Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, provides a single accounting model, based on the framework established in Statement 121, for long-lived assets to be disposed of by sale. It also resolves significant implementation issues related to Statement 121. It is effective for financial statements issued for fiscal years beginning after Dec. 15, 2001.

Statements on Auditing Standards

No. 94, The Effect of Information Technology on the Auditor's Consideration of Internal Control in a Financial Statement Audit, provides guidance with regard to information technology's effect on internal control, and on the auditor's understanding of internal control and the assessment of control risk. It clarifies the nature of the understanding of the financial reporting process the auditor should obtain. It is effective for audits of financial statements for periods beginning on or after June 1, 2001.*

Government Accounting Standards Board

Statement No. 37, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments: Omnibus clarifies certain provisions of Statement 34, Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments, for more consistent application and modifies others to meet changing requirements. The new standard addresses:

what topics should be covered in Management's Discussion and Analysis (MD&A);
how to report a change from the depreciation method to the modified approach for infrastructure assets;
why fines and forfeitures should be classified as program revenues;
how to determine if a governmental or enterprise fund is required to be reported as a "major" fund.

Statement 37 also modifies the requirements of Statement 34 to:

eliminate the requirement to capitalize construction-period interest for governmental activities;
change the minimum level of detail required for business-type activities in the statement of activities from segments to different identifiable activities.

Additionally, Statement 37 amends Statement No. 21, Accounting for Escheat Property, to clarify the effects of changes to the fiduciary fund structure required by Statement 34.

The provisions of Statement 37 should be implemented simultaneously with Statement 34. For governments that implemented Statement 34 prior to issuance of the amendment, the new requirements become effective for reporting periods beginning after June 15, 2000.

Statement No. 38, Certain Financial Statement Note Disclosures, modifies, adds and deletes various note disclosure requirements. Those requirements address revenue recognition policies, actions taken in response to legal violations, debt service requirements, variable-rate debt, receivable and payable balances, interfund transfers and balances, and short-term debt. The new requirements address the needs of users of financial statements as determined through the Board's extensive research. Statement 38 provisions are generally effective when the provisions of Statement 34 are required to be implemented.

Copies of Statement 37 (order code GS37) and Statement 38 (order code GS38) can be ordered through the GASB Order Department by calling (800) 748-0659 or by placing an order online at www.gasb.org.

Financial Accounting Standards Board

Technical Bulletin, Effective Date for Certain Financial Institutions of Certain Provisions of Statement 140 Related to the Isolation of Transferred Financial Assets, defers application of the isolation standards until 2002.

* AICPA Order Department, (800) 362-5066 or memsat@aicpa.org.

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