Reporting Requirements for Annual Financial Reports of State Agencies and Universities
Capital assets are reported in the applicable governmental or business-type activities columns in the government-wide financial statements (GWFS) as required in GASB 34. Capital assets are those defined by the state as assets with an initial cost meeting the thresholds established by the Comptroller’s office and with an estimated useful life in excess of one year. For more information, see Capitalization Thresholds.
In governmental funds, use capital assets adjustments (fund type 11) to record the basis conversion transactions in USAS for the GWFS. The only transactions recorded to governmental funds in USAS related to capital assets are initial purchases or sale of capital assets (cash transactions). All other transactions (such as restatements, transfers, depreciation, amortization and disposals) are recorded in the basis conversion fund type 11.
Report capital asset activity for proprietary funds and discrete component units using the full accrual basis of accounting. Follow the instructions pertaining to business-type activities when recording capital asset activity for proprietary funds and discrete component units.
GASB 51 was implemented in fiscal 2010. This statement clarified questions on the accounting and financial reporting requirements for intangible assets as capital assets.
GASB 87 established accounting and financial reporting requirements for leased assets and the amortization of the right to use those assets.
GASB 94 examines arrangements between the state agency (the transferor) and a governmental or non-governmental entity (the operator) to provide public services. This is accomplished by the transferor allowing the operator to have control of the right to operate or use a nonfinancial governmental asset (like infrastructure or any other capital asset) for a period of time in an exchange or exchange-like transaction. Depending on the arrangement, the underlying capital asset might be:
- Treated as leased assets and follow GASB 87 guidance
- Considered as either a new asset or an improvement to an existing capital asset
GASB 96 defines a subscription-based information technology arrangement (SBITA) and establishes accounting and financial reporting requirements for SBITAs and the amortization of the right to use another party’s IT software (alone or in combination with tangible capital assets) as specified in the contract for a period of time in an exchange or exchange-like transaction.