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The Voice of the

Commonwealth's Counties

Financial Facts

GASB has issued a new standard requiring state and local governments to present direct borrowings and direct placements of debt separately from other types of debt in their financial statements. GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements, clarifies which liabilities governments should include in disclosures related to debt. It requires debt borrowings and direct placements to be presented separately because they may expose a government to risks that are different from or in addition to risks related to other types of debt.

The new standard also requires the disclosure of additional essential debt-related information for all types of debt, including amounts of unused lines of credit as well as assets pledged as collateral for debt. It requires disclosure of terms in debt agreements related to:

  • Significant events of default with finance-related consequences
  • Significant termination events with finance-related consequences
  • Significant subjective acceleration clauses

Requirements take effect for reporting periods beginning after June 15, 2018, and earlier application is encouraged.

VACo Contact: Vicky Steinruck, CPA

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