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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 2 – Capital Assets

According to GASB 34 and GASB 35, capital assets are reported in the governmental activities column on the government-wide statement of net position. Capital assets of proprietary funds are reported on both the government-wide and fund financial statements. Capital assets of fiduciary funds are reported only on the statement of fiduciary net position.

GASB 42 established accounting and financial reporting standards for impairment of capital assets and established accounting requirements for insurance recoveries. For additional information, see Impairment of Capital Assets and Insurance Recoveries.

GASB 62 established accounting and financial reporting standards for:

  • Capitalization of interest expense (no longer required — for more information, see GASB 89 below).
  • Non-monetary transactions (for more information, see Non-Monetary Transactions).

GASB 72 requires measurement at acquisition value (an entry price) for:

  • donated capital assets
  • donated works of art
  • historical treasures and similar assets
  • capital assets received in a service concession arrangement

These assets were previously measured at fair value.

GASB 89 established accounting requirements for interest costs incurred before the end of a construction period. Such interest costs include all interest that was previously accounted for in accordance with the requirements of paragraphs 5–22 of GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, which are superseded by GASB 89.

On financial statements prepared using the economic resources measurement focus, an interest cost incurred before the end of a construction period is recognized as an expense in the period in which the cost is incurred. Such an interest cost is not capitalized as part of the historical cost of a capital asset.

On financial statements prepared using the current financial resources measurement focus, an interest cost incurred before the end of a construction period is recognized as an expenditure on a basis consistent with governmental fund accounting principles.

GASB 87 established accounting and financial reporting standards for the leasing activities of governments. Leased assets, and the related accumulated amortization, are disclosed separately from other capital assets.

GASB 96 established accounting and financial reporting standards for use of subscription-based information technology arrangements (SBITAs). The right to use the underlying information technology assets (and the related accumulated amortization) are disclosed separately from other capital assets.