Management Report and Recommendations 12/31/1993

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ACCOUNTING STANDARDS UPDATE Appendix B Page 3 2. An entity may elect not to subject itself to FASB guidance issued subsequent to the cutoff date. In that case, even FASB amendments of guidance issued prior to the cutoff date would not be applicable to proprietary operations. The provisions of this Statement are effective for financial statements for periods beginning after December 15, 1993. GASB No. 21 Accounting for Escheat Property This Statement was issued in October, 1993 and establishes standards for the fund type to be used to report escheat property and for reporting liabilities and interfund transfers relating to escheat property. An escheat is the reversion of property to a governmental entity in the absence of legal claimants or heirs. This Statement requires escheat property generally to be reported in either an expendable trust fund or the fund to which the property ultimately escheats (the "ultimate" fund). Escheat revenue should be reduced and a fund liability reported to the extent that it is probable that escheat property will be reclaimed and paid to claimants. Payments to claimants should reduce the liability. If escheat property is initially reported in an expendable trust fund, amounts transferred to the ultimate fund should be reported as an operating transfer. If, as a result of the transfer, the remaining assets of the expendable trust fund are less than the liabilities of the fund, the difference should be reported as an "advance to" in the expendable trust fund and an "advance from" in the ultimate fund. If, however, the escheat assets of the expendable trust fund exceed the liabilities of that fund, the difference should be reported as fund balance. The provisions of this Statement are effective for financial statements for periods beginning after June 15, 1994. GASB No. 22 Accounting for Taxpayer - Assessed Tax Revenues is Governmental Funds This Statement was issued in December, 1993 and establishes standards for the recognition of revenues from taxpayer - assessed taxes, such as sales and income taxes, in governmental funds. The AICPA's 1974 Industry Audit Guide essentially required cash -basis recognition of taxpayer - assessed tax revenues. GASB No. 22 requires revenues from taxpayer - assessed taxes, net of estimated refunds, to be recognized in the accounting period in which they become susceptible to accrual (measurable and available to finance expenditures of the fiscal period). This Statement is effective for financial statements for periods beginning after June 15,1994.