News Release 06-28-01


GASB Issues Two Statements In Connection with Its Landmark Financial Reporting Model for State and Local Governments

Norwalk, CT, June 28, 2001—The Governmental Accounting Standards Board (GASB) has issued two standards to be implemented simultaneously with the new financial reporting model, Statement No. 37, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments: Omnibus and Statement No. 38, Certain Financial Statement Note Disclosures.

In commenting on the issuance of Statement 37, GASB Chairman Tom Allen remarked, “This standard helps governments implement Statement 34 and enhances the usefulness of state and local governments’ financial statements under the new reporting model. Statement 38 will provide users with new information and eliminates some disclosures that the Board found were no longer needed."

Statement 37: Reporting Model Omnibus

Statement 37 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; and 
  • 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, and 
  • 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 38: Note Disclosures

Statement 38 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.

These new requirements address the needs of users of financial statements as determined through the Board's extensive research. In discussing the benefits to users, Roberta Reese, GASB Project Manager, stated, “With respect to interfund transfers, users of financial statements will for the first time be able to trace transfers from the source fund to the receiving fund, and to understand why the government uses transfers. Now users also will be able to see the purpose and extent of the use of short-term debt, which is especially important for debt issued and redeemed within the government's fiscal year.”

Statement 38 is the result of the GASB’s efforts to ensure the continuing effectiveness of existing standards. The Board reaffirmed that most note disclosure requirements continue to be relevant.

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 telephoning 800-748-0659 or by placing an order online at

About the Governmental Accounting Standards Board

The GASB is the independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board's diverse constituency, including preparers and auditors of government financial statements, users of those statements and members of the academic community. More information about the GASB can be found at this website.