On the Horizon:
A Look at Upcoming Proposals

The GASB is scheduled to propose new or revised standards in four different projects this coming May and June. Those Exposure Drafts (EDs) are: Subscription-Based Information Technology Arrangements (SBITA), Public-Private Partnerships and Availability Payment Arrangements (PPPs and APAs, respectively), Internal Revenue Code Section 457 Deferred Compensation Plans, and an Omnibus proposal. This article briefly describes what the EDs for those projects are about and explains why proposed standards sometimes are released in close proximity.



The SBITA ED is intended to provide needed accounting guidance for a burgeoning type of transaction. (Click here for more information on this project.) Although GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, addresses on-premise computer software, stakeholders have raised questions about how cloud computing and other remote-access forms of software applications and data storage should be accounted for.

The GASB is expected to propose an approach that mirrors the guidance in Statement No. 87, Leases, to account for the subscription payments. The ED also adopts a project stage-based approach to recognizing the cost of activities incurred by the government in the development and implementation of the SBITA (other than the subscription payments) that is similar to what exists in Statement 51. The ED is expected to be available in May, with a comment deadline in August.


PPPs and APAs

In addition to reexamining Statement No. 60, Accounting and Financial Reporting for Service Concession Arrangements (SCAs), this project also seeks to provide guidance for transactions that currently fall outside of the scope of both Statements 60 and 87, such as APAs.

Like the SBITA project, this ED is expected to propose applying guidance originally introduced in Statement 87 to SCAs and PPPs. It also would propose that accounting standards for APAs be based on the nature of the components of the arrangements. The ED is expected to be considered by the Board for issuance in June, with a comment deadline in September.


Deferred Compensation Plans

The Board’s reexamination of Statement No. 32, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans, found that some of those plans have evolved to resemble defined contribution pension plans. Consequently, the related implementation guidance in Question 5.116.5 of the Comprehensive Implementation Guide that governments with Section 457 plans should not apply to those plans the standards in Statement No. 68, Accounting and Financial Reporting for Pensions, no longer seems appropriate.

The Board tentatively has decided to propose that if a Section 457 plan meets the definition of a pension plan in Statement 68 (as well as Statements No. 67, Financial Reporting for Pension Plans, and No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement 68, and Amendments to Certain Provisions of GASB Statements 67 and 68), a government should apply the pension standards. The ED is expected to be considered by the Board for issuance in June, with a September comment deadline.



The Omnibus project addresses a variety of topics that, on their own, do not warrant a separate pronouncement. This Omnibus project will propose clarifying revisions to existing standards related to: the implementation date of Statement 87 applying to fiscal year-ends rather than period ends at initial implementation; transfers of assets within a reporting entity; an additional exception to applying acquisition value to certain assets and liabilities obtained in a government acquisition related to asset retirement obligations; certain effects of Statement No. 84, Fiduciary Activities; reinsurance recoveries; and a technical correction to Statement No. 72, Fair Value Measurement and Application. The ED is expected to be considered by the Board for issuance in June, with an October comment deadline.

Feedback Welcomed

All of the above proposals will be available on the GASB website once approved by the Board. Stakeholders are encouraged to comment on any or all of those EDs. The Board looks forward to hearing your feedback.


Why Does the GASB Sometimes Issue Multiple Due Process Documents at the Same Time?

Ideally, the GASB would issue proposed standards at least a few months apart. In fact, when the GASB prepares its technical plan, it normally seeks to spread out the issuance of due process documents as much as possible. That makes it easier for stakeholders to review and respond to them. However, there are reasons why that is not always possible.

The most common reason why multiple due process documents come out close together is because stakeholders need timely guidance. Most GASB projects do not run for several years like those that resulted in Statements 84 and 87. Rather, the majority of projects address practice issues that, in many instances, require the GASB to provide prompt guidance that is needed as soon as possible. For example, the issue of the implementation deadline for Statement 87 is particularly urgent for some governments. The approaching effective date of Statement 87 also focuses attention on transactions such as PPPs and SBITAs that need similar guidance but fall outside the scope of that standard.

The GASB occasionally issues a pair of related due process documents simultaneously on major projects, such as the two Preliminary Views in 2018 on recognition concepts and the financial reporting model. (The EDs for those two projects will be issued simultaneously as well.) Usually, though, when EDs are issued closely together on different topics, you can presume that they are narrowly scoped and/or applicable to a minority of governments. EDs on very large projects like the Financial Reporting Model Reexamination or Revenue and Expense Recognition rarely would be issued close together. The four EDs expected in the coming months address relatively narrow topics, and many of those topics are relevant to a relatively small group of governments. Although it may be a significant change to have to begin reporting a Section 457 plan under the pension standards, for instance, most governments do not participate in those plans. (Also, it should be noted that the standards applicable to defined contribution pension plans are considerably less extensive than those for defined benefit plans.)

We value your feedback and want to do all we can to encourage it. Without question, greater stakeholder engagement in standards-setting activities leads to better standards.