GASB 34

Governmental Accounting Standards Board Statement 34, issued in June 1999, represents a significant change to traditional government financial reporting standards. For the first time, accrual accounting is required for all government activities and all capital assets are generally required to be depreciated. Additional supplementary information, such as the Management's Discussion and Analysis (MD&A), is now required.

Q: Does GASB 34 apply to me?

GASB 34 applies to your organization if it is a state or local governmental entity, including:

1 - General purpose governments


2 - Public school districts


3 - Public benefit corporations


4 - Public Utilities


5 - Public hospitals and healthcare providers


6 - Public college or university (see GASB 35 below)

Q: What is GASB Statement 35?

GASB 35 is an amendment of GASB Statement No. 34 (Basic Financial Statements-and Management's Discussion and Analysis-for Public Colleges and Universities). Simply stated, it means that GASB 34 also applies to public colleges and universities.

Q: When does GASB 34 go into effect?

Q: What are the fixed asset requirements of GASB 34?

GASB 34 requires that fixed asset records must be maintained by public entities in a complete, accurate and detailed manner and that governments report all capital assets with the consideration of depreciation, including infrastructure assets and "historical treasures."
 
Q: What kinds of assets am I required to report to be in compliance with GASB 34?

Governments should report all capital assets, including infrastructure assets, in the government-wide statement of net assets and generally should report depreciation expense in the statement of activities.

Capital assets are those assets that have a useful life extending beyond a single reporting period. Capital assets should be recorded at their original cost (historical cost). Some examples of capital assets are:

1 - Land and easements

2 - Buildings

3 - Equipment

4 - Machinery

5 - Vehicles

6 - Infrastructure (Such as roads, bridges, sewers, dams, lighting systems, sidewalk systems and tunnels).

7 - Infrastructure assets that are part of a network or subsystem of a network are not required to be depreciated as long as the government manages those assets using an asset management system that has certain characteristics and the government can document that the assets are being preserved.

Q: Can fixed asset management software help me meet my GASB 34 requirements?

In order to comply with the reporting requirement for capital assets, you will need complete fixed asset records that include the acquisition date and cost, asset lives and depreciation method for all capital asset classifications. You'll also need to depreciate capital assets and produce detailed fixed asset reports that help you complete the Statement of Activities required by GASB Statement 34/35.

A variety of fixed asset accounting software packages exist today that can help you calculate depreciation on your capital assets. For information on FAS® fixed asset management solutions from Sage Software (formerly Best Software) and IMS, please visit our Fixed Assets Software section to learn more about FASgov Suite, the FAS® solution for your GASB 34/35 compliance needs.

Note: this Question and Answer sheet is not meant to be an authoritative guide.

Also See: FAS 50 Asset Accounting (formerly Sage FAS FirstStep)®, FAS Asset Accounting®, FAS Asset Inventory®, FAS Suite®, FAS SQL®, GASB

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