Dataline: The GASB's Derivatives Standard -- Recognition and Reporting Guidance for State and Local Government Entities (No. 2010-37)
Dataline
Entities that apply accounting rules issued by the Governmental Accounting Standards Board (GASB) are implementing a comprehensive new accounting standard on derivative instruments. The standard requires that derivatives be reported at fair value on the balance sheet and that all potential hedges be evaluated for effectiveness. The standard is expected to dramatically affect balance sheets, as most governments historically accounted for derivatives off-balance sheet. The standard impacts financial statements prepared for fiscal years ending June 30, 2010 and thereafter.
This Dataline discusses the key provisions of the new standard and offers PwC's observations on implementing it.