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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

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Reporting Requirements for Annual Financial Reports of State Agencies and Universities

Notes & Samples

NOTE 6 – Bonded Indebtedness
Conduit Debt

GASB Statement No. 91, Conduit Debt Obligations, provides a single method of reporting conduit debt obligations and clarity associated with:

  • Commitments extended by issuers
  • Arrangements associated with conduit debt obligations
    –AND–
  • related note disclosures

According to GASB 91, a conduit debt obligation is a debt instrument issued in the name of a state or local governmental entity (an agency) that is for the benefit of a third party primarily liable for the repayment of the debt instrument (the third-party obligor).

For more information on conduit debt obligation characteristics, see NOTE 30 – Financial Guarantees.

Although conduit debt obligations bear the name of the agency as the issuer, the agency has no obligation for such debt beyond the resources provided by a lease or loan with the third party on whose behalf they are issued.

If an agency has any conduit debt obligations, disclose the following in Note 6:

  • A general description of the conduit debt transactions
  • The aggregate amount of all conduit debt obligations outstanding at the balance sheet date
  • A clear indication that the issuer has no obligation for the debt beyond the resources provided by related leases or loans