GASB Seeks Feedback on Revenue and Expense Recognition Models
In its recently issued Invitation to Comment, Revenue and Expense Recognition, the Governmental Accounting Standards Board (“GASB”) requests feedback on a new revenue and expense recognition model. This comprehensive model would help state and local governments address various transactions and improve their comparisons of transaction accounting and reporting. The model will also provide financial report users more insightful information for making decisions and evaluating accountability. The Invitation to Comment discusses the following two models: Exchange/Nonexchange Model: This model’s classification process is based on the current definition of exchange transactions. The model’s recognition process would rely on current guidance for nonexchange. Read More.
Government Could Shut Down Again Thursday
With the current stopgap spending bill expiring in two days, Congress is scrambling to avoid another government shutdown. The House will vote today on another short-term continuing resolution that would fund the government until Thursday, March 22. Lawmakers continue to negotiate on a budget for the 2018 fiscal year, but disagreements exist regarding proposed increases in defense, non-defense, and infrastructure spending. Other budget disputes involve funding for Dreamers/Deferred Action for Childhood Arrivals (DACA), hurricane and wildfire emergencies, and community health centers. No agreements have been reached on such matters. Meanwhile, the White House wants anomalies (i.e., additional funding) included in. Read More.
Guidance Issued on Unpaid Interns and FLSA Compliance
The Department of Labor (“DOL”) has introduced a new seven-factor test to help determine whether students and interns working at for-profit organizations qualify as employees eligible to receive minimum wage under the Fair Labor Standards Act (“FLSA”). An update from the previous version, the DOL’s new test is more beneficial to companies and examines the primary beneficiary of the employer-intern work relationship. The new guidance is also applicable to nonprofit organizations that offer interns stipends or other payments that are below the nation’s minimum wage ($7.25/hour).
College Endowments Highest in Three Years
According to their joint annual study, the National Association of College and University Business Officers (“NACUBO”) and Commonfund are reporting that college endowments are at a three-year high. For the fiscal year ending June 2017, the annual net endowment returns at colleges and universities averaged 12.2 percent. The percentage is a significant jump from the fiscal year 2016 average of -1.9 percent, and it marks the highest average achieved since the fiscal year 2014 (15.5 percent). Despite the turnaround, recent data reveals that the 10-year average annual return decreased from 5 percent in 2016 to 4.6 percent in 2017. More. Read More.
NCAA Pledges to Reform Men’s Basketball
National Collegiate Athletic Association president Mark Emmert promises to act fast on recent allegations concerning men’s basketball. Ahead of the start of next season, Emmert wants to implement recommendations offered by the NCAA’s independent commission on college basketball. The NCAA created the committee following an unearthed scheme that lured basketball recruits with cash to attend certain schools. Emmert said the NCAA’s Board of Governors had reserved $10 million to carry out the commission’s recommendations, which the NCAA expects to receive in April. Additionally, starting next fiscal year, the NCAA will dedicate $2.5 million annually to reform the sport. Check out Inside Higher Ed for more on the NCAA’s attempts to reform men’s basketball.
Guidance Proposed on Capitalization of Interest Cost
The Governmental Accounting Standards Board (“GASB”) wants to update guidance on construction period interest costs. In its Exposure Draft, Accounting for Interest Cost during the Period of Construction , the GASB proposes expensing interest costs incurred during the construction period. For financial statements prepared using the current financial resources measurement focus, interest incurred during the construction period would still be categorized as an expenditure on a basis in line with governmental fund accounting principles. If approved, the finalized GASB Statement would be applied to reporting periods starting after December 15, 2018. Early application is encouraged. Comments on the Exposure Draft are due March 5, 2018.