Professional Library



	GASB Summaries

Statement No. 24
Accounting and Financial Reporting for Certain Grants and Other Financial Assistance

STATUS

Issue Date: June 1994

Effective Date: For periods beginning after June 15, 1995

Affects: Amends NCGAS 2, paragraph 8
Amends NCGAS 6, paragraph 46
Amends NCGAI 6, paragraph 5
Amends GASBS 5, paragraphs 35, 39, 41, and 47

Affected by: No other pronouncements

Primary Codification Section Reference: G60

Abbreviations for Accounting Pronouncements
GASBS - GASB Statements
GASBI - GASB Interpretations
GASBTB - GASB Technical Bulletins
GASBCS - GASB Concepts
BFC - Basis for Conclusions
NCGAS - NCGA Statements
NCGAI - NCGA Interpretations
SOP - AICPA Statements of Position
ASLGU - AICPA Audit Guide

SUMMARY

This Statement establishes accounting and financial reporting standards for pass-through grants, food stamps, and on-behalf payments for fringe benefits and salaries.

Pass-through grants are those grants that are received by a recipient government to transfer to or spend on behalf of a secondary recipient. As a general rule, recipient governments should recognize all cash pass-through grants as revenue and expenditures or expenses in a governmental, proprietary, or trust fund. In those infrequent cases in which a recipient government serves only as a cash conduit-that is, it has no administrative or direct financial involvement in the program-the grant should be reported in an agency fund.

This Statement requires state governments to recognize their distributions of food stamp benefits as revenue and expenditures in the general fund or a special revenue fund, whether the state government distributes the benefits directly or through agents and whether the benefits are in paper or electronic form. State governments should report food stamp balances held by them or by their agents at the balance sheet date as an asset offset by deferred revenue.

On-behalf payments for fringe benefits and salaries are direct payments made by one entity (the paying entity) to a third-party recipient for the employees of another, legally separate entity (the employer entity). They include payments made by governmental entities on behalf of nongovernmental entities and payments made by nongovernmental entities on behalf of governmental entities. This Statement requires employer governments to recognize revenue and expenditures or expenses for these on-behalf payments. Revenue should equal the amounts that third-party recipients have received and that are receivable at year-end for the current fiscal year. For employer governments that are not legally responsible for the payments, expenditures or expenses should equal the amounts recognized as revenue. Employer governments that are legally responsible for the payments should follow accounting standards for that type of transaction to recognize expenditures or expenses and related liabilities or assets. This Statement requires governmental entities that make on-behalf payments for fringe benefits and salaries to classify those payments in the same manner that they classify similar cash grants to other entities.

The provisions of this Statement are effective for financial statements for periods beginning after June 15, 1995. Earlier application is encouraged.

Unless otherwise specified, pronouncements of the GASB apply to financial reports of all state and local governmental entities, including public benefit corporations and authorities, public employee retirement systems, and governmental utilities, hospitals and other healthcare providers, colleges, and universities. Paragraph 4 discusses the applicability of this Statement.

Accounting:

Taxation:

Ethics & Regulation

Risk Management

Bookshelf