The Governmental Accounting Standards Board (GASB) released for comment on Nov. 25 a couple of Exposure Drafts: an Exposure Draft of a proposed Statement, Subsequent Events, and an Exposure Draft of a proposed Implementation Guide, Implementation Guidance Update—2025.
Input for the Exposure Draft, Subsequent Events is due by Feb. 21, 2025. Meanwhile, feedback on the Exposure Draft, Implementation Guidance Update—2025 should be in by Jan. 24, 2025.
The top objective of the Exposure Draft, Subsequent Events, is to examine the existing requirements in Statement No. 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards, related to subsequent events and improve the financial reporting requirements for them.
The proposed guidance in the Exposure Draft, Implementation Guidance Update—2025, consists of questions and answers meant to clarify, explain, or elaborate on certain GASB pronouncements.
GASB’s pre-agenda research on subsequent events demonstrated diversity in practice in the existing guidance's application. Thus, the project is designed to improve consistency in the GASB literature application and better meet financial statement users' information needs. To do that, the Exposure Draft clarifies the various types of subsequent events when note disclosures would be needed and the information that would be part of those note disclosures.
The proposed Statement defines subsequent events as transactions or other events that happen after the financial reporting statements’ date but before the date, the financial statements are available to be issued. The Exposure Draft describes the date the financial statements are available to be issued. The financial statements are complete in a form and format that complies with generally accepted accounting principles (GAAP), and all approvals needed for issuance have already been obtained.
The proposed Statement would clarify the subsequent events that comprise recognized and nonrecognized events and put forth specific note disclosure requirements for nonrecognized events.
Meanwhile, the Exposure Draft, Implementation Guidance Update—2025, has nearly 20 proposed new and amended questions and answers that address leases, accounting changes and error corrections, conduit debt obligations, cash flows reporting, compensated absences and financial reporting model improvements.
The Board periodically issues new and updated guidance to assist state and local governments in applying GAAP to specific facts and circumstances that they encounter. The GASB develops the guidance based on the following:
• Application issues raised in due process about GASB pronouncements;
• Questions it receives during the year;
• Topics identified by Governmental Accounting Standards Advisory Council members and other stakeholders.