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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 30 – Non-Exchange Financial Guarantees

Note Disclosures

According to GASB 70, paragraphs 14–18, note disclosure requirements for agencies that extend non-exchange financial guarantees and agencies that issue guaranteed obligations are presented below.

State Agencies that Extend Non-Exchange Financial Guarantees

According to GASB 70, paragraph 14, regardless of the likelihood of payment being required, an agency that extends non-exchange financial guarantees discloses the:

  • Description of guarantee identifying the:
    • Legal authority and limits for extending the guarantees
    • Types of obligations guaranteed
    • Relationship of the agency to the issuer(s) of guaranteed obligation
    • Length of time of the guarantee
    • Arrangements for recovery payments from the issuer(s) of the guaranteed obligation
  • Total outstanding guaranteed amount at the reporting date

According to GASB 70, paragraph 15, the agency recognizing the liability or that made payments during the reporting period on the non-exchange financial guarantees discloses the:

  • Description of the timing of recognition and measurement of the liability and changes in recognized liability including (in a table format) the:
    • Liability balance at the beginning of the reporting period
    • Increases of the liability (including initial recognition and adjustments increasing estimates) during the reporting period
    • Guarantee payments made during the reporting period and adjustments decreasing estimates
    • Liability balance at the end of the reporting period
  • Cumulative indemnification payments made during the reporting period
  • Amounts expected to be recovered from the payments made through the reporting period

State Agencies that Issue Guaranteed Obligations

According to GASB 70, paragraph 16, an agency that has outstanding obligations guaranteed by another party discloses the:

  • Name of the party providing the guarantee
  • Amount of the guarantee
  • Length of time of the guarantee
  • Amount paid during the reporting period by the party (guarantor) extending the guarantee
  • Cumulative amount paid by the guarantor extending the guarantee
  • Description of requirements to repay the guarantor
  • Outstanding amounts required to be repaid to the guarantor

According to GASB 70, paragraph 17, if the guarantor made payments for the agency issuing the guaranteed obligations and no obligation is outstanding at the end of the reporting period, the agency issuing the obligation discloses the:

  • Amount paid by the guarantor during the reporting period
  • Cumulative amount paid by the guarantor
  • Description of requirements to repay the guarantor
  • Outstanding amount (if any) required to be paid to the guarantor

Effective Date and Transition

According to GASB 70, paragraph 18, the agency records a restatement to the beginning fund balance/net position for the cumulative effect of changes made to implement GASB 70 during the implementation year. The effective date is June 15, 2013.

Submit a copy of the agency’s Note 30 from its published AFR through the ONDSS web application. The required format is a Microsoft Word document (latest version: docx) with header information that includes: agency name/number and note number/name. If Note 30 does not apply, do not submit a note to indicate “not applicable.”