GASB Issues Standard for Irrevocable Split-Interest Agreements
Yesterday, the Governmental Accounting Standards Board (“GASB”) issued GASB Statement No. 81, Irrevocable Split-Interest Agreements. Statement No. 81 addresses when irrevocable split-interest agreements represent an asset for reporting purposes when the resources are managed by a third party. The standard also offers guidance for situations in which the government is the asset holder. GASB Chairman David Vaudt said the guidance will lead to more consistent accounting for irrevocable split-interest agreements and give users access to more comparable information. Government entities are required to apply the new guidance retroactively for reporting periods beginning after December 15, 2016. Early application is encouraged.
More on the issuance of GASB Statement No. 81 is available on the Journal of Accountancy Web site.