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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

Specialized Accounting

Disposals of Government Operations

Disposals of government operations are the removal of specific activities of a state agency.

A state agency disposing operations recognizes a gain or loss on the disposal by:

  • Reporting a special item on the operating statement in the period of the disposal
  • Recognizing only costs directly associated with the disposal of the operations

    Examples: Benefit costs provided to state employees for involuntary terminations (GASB 47) and contract termination costs (GASB 62, paragraphs 96-112) related to the disposal of operations.

  • Measuring the special item:
    • Based on the effective transfer date or the date of sale of the operations in a proprietary fund
    • Equal to the net fund balance of the operation, net of consideration (if any), if held in a governmental fund