Irrevocable Split-Interest Agreement Accounting & Financial Reporting Clarified Under GASB Proposal
On June 12, 2015, the Governmental Accounting Standards Board (GASB) issued an exposure draft clarifying accounting and financial reporting for split-interest agreements. The proposal would standardize recognition and measurement for a government receiving resources from an irrevocable split-interest agreement by specifying the timing of the government’s recognition of assets, liabilities and deferred inflows of resources. The proposal also includes certain irrevocable split-interest agreements administered by a third party, if the beneficial interests are under the control of the government and embody present service capacity. Entities most affected by these amendments likely will be public colleges, universities and hospitals. If adopted, the standard would be effective for periods beginning after December 15, 2016, with early adoption permitted. Comments are due by September 18, 2015. A final standard is expected in March 2016.