GASB Statement No. 72 – Fair Value Measurement and Application
On March 2, 2015, the Governmental Accounting Standards Board (GASB) released Statement No. 72, Fair Value Measurement and Application, which would generally require state and local governments to measure investments at fair value. GASB’s goal is to enhance comparability of governmental financial statements by requiring fair value measurement for certain assets and liabilities using a consistent definition and accepted valuation techniques. This standard expands fair value disclosures to provide comprehensive information for financial statement users about the impact of fair value measurements on a government’s financial position. The requirements are effective for financial statements for periods beginning after June 15, 2015, with early application encouraged.
Governments should consider what additional investments may be subject to fair value measurement and if existing internal controls are sufficient. Governments also should consider if current information systems are adequate to provide the information required for the new disclosures and if any valuation specialists may be needed.