On December 7, GASB issued guidance for state and local governments to address asset retirement obligations related to tangible capital assets. Statement No. 83, Certain Asset Retirement Obligations, sets guidance for determining the timing and pattern of recognition for liabilities and corresponding deferred outflow of resources related to asset retirement obligations.
A government that has the legal obligations to perform future asset retirement activities related to its tangible capital assets is required under the guidance to recognize a liability and a corresponding outflow of resources. The guidance also identifies circumstances that trigger recognition of such transactions. This guidance would enhance comparability of financial statements among governments by establishing uniform criteria for governments to recognize and measure certain retirement obligations.
The requirements are effective for reporting periods beginning after June 15, 2018.
VACo Contact: Vicky Steinruck, CPA