GASB 34 Watch

What is GASB 34?

GASB is the Governmental Accounting Standards Board, which monitors the financial reporting methods for state and local governments.

34 refers to Statement No. 34: Basic Financial Statements--and Management's Discussion and Analysis--for State and Local Governments, in effect since 1979.

In June 1999, the GASB proposed significant changes to Statement No. 34. The new initiative, known at GASB34, intends to better reflect the way the current infrastructure is accounted for, thereby making financial reporting easier and more comprehensive for today's state and local government agencies.

The new GASB34 standards provide two methods for reporting their infrastructure assets:

1. Reporting of infrastructure assets is calculated by the historic cost less depreciation.

 
2. Reporting is done by the infrastructure asset management system, also know as the modified approach, and is based on the agency meeting the following requirements:
   • Have an up-to-date inventory of eligible infrastructure assets.
   • Perform condition assessments of the eligible infrastructure assets every three years and summarize the results using a measurement scale.
   • Estimate each year the annual amount to maintain and preserve the eligible infrastructure assets at the condition level established and disclosed by the government.

Overall, GIS promotes both methods and is especially beneficial to the modified approach where the power of GIS can provide a powerful database backbone.

GASB34 and GIS will have a dramatic effect on the way government does financial reporting, specifically in areas such as

• Budget Process
• Asset/Maintenance Management
• Customer Service
• Capital Improvement and Rehabilitation Planning
• Condition Assessment
• Work Orders