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ACCOUNTING STANDARDS UPDATE <br />Appendix B <br />Page 4 <br />GASB No. 23 Accounting and Financial Reporting for Refundings of <br />Debt Reported by Proprietary Activities <br />This Statement was issued in December, 1993 and applies to current refundings and <br />advance refundings that result in defeasance of debt. Prior to the issuance of GASB <br />No. 23, the reporting of gains or losses from a defeasance was determined by APB <br />Opinion No. 26. APB Opinion No. 26 required the immediate recognition of a gain or <br />loss in determining net income in the period of extinguishment. GASB No. 23 now <br />requires this gain or loss to be deferred and amortized as a component of interest <br />expense over the shorter of the remaining life of the old debt or the life of the new debt. <br />This Statement is effective for financial statements issued for periods beginning after <br />June 15, 1994. <br />