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ACCOUNTING STANDARDS UPDATE <br />APPENDIX B <br />For guidance issued after the cutoff date, proprietary funds make use of either of the following <br />approaches to FASB guidance issued after November 30, 1989: <br />1. An entity may elect to continue to follow FASB guidance that does not conflict with or <br />contradict GASB guidance. If this election is made, it must be followed consistently. It <br />would not be appropriate to follow some FASB pronouncements, issued subsequent to <br />the cutoff date, but not others. <br />2. An entity may elect not to subject itself to FASB guidance issued subsequent to the cutoff <br />date. In that case, even FASB amendments of guidance issued prior to the cutoff date <br />would not be applicable to proprietary operations. <br />The provisions of this Statement are effective for financial statements for periods beginning after <br />December 15, 1993. <br />GASB No. 21 Accounting for Escheat Property <br />This statement was issued in October, 1993 and establishes standards for the fund type to be used <br />to report escheat property and for reporting liabilities and interfund transfers relating to escheat <br />property. An escheat is the reversion of property to a governmental entity in the absence of legal <br />claimants or heirs. <br />This Statement requires escheat property generally to be reported in either an expendable trust <br />fund or the fund to which the property ultimately escheats (the "ultimate fund "). Escheat revenue <br />should be reduced and a fund liability reported to the extent that it is probable that escheat <br />property will be reclaimed and paid to claimants. Payments to claimants should reduce the <br />liability. <br />If escheat property is initially reported in an expendable trust fund, amounts transferred to the <br />ultimate fund should be reported as an operating transfer. If, as a result of the transfer, the <br />remaining assets of the expendable trust fund are less than the liabilities of the fund, the <br />difference should be reported as an "advance to" in the expendable trust fund and an "advance <br />_ from" in the ultimate fund. If, however, the escheat assets of the expendable trust fund exceed <br />the liabilities of that fund, the difference should be reported as fund balance. <br />The provisions of this Statement are effective for financial statements for periods beginning after <br />June 15, 1994. <br />PREPARED BY TAUTGES, REDPATH & CO., LTD. PAGE 3 OF 8 <br />