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The Voice of the

Commonwealth's Counties

Financial Facts

State and local governments will be required to present direct borrowings and direct placements of debt separately from other types of debt in note disclosures in their financial statements for reporting periods beginning after June 15, 2018. Under a new GASB standard, GASB No.88, Certain Disclosures Related to Debt, Including Direct Borrowings and Direct Placements, this should clarify which liabilities governments should include in their note disclosures related to debt.

GASB is requiring direct borrowings and placements be presented separately because they may expose a government to risks different from, or in addition to, risks related to other types of debt.  The new standard requires the disclosure of additional essential debt-related information for all types of debt, including amounts of unused lines of credit and assets pledged as collateral for debt.

Also required to be disclosed are terms specified in debt agreements related to:

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

VACo Contact: Vicky Steinruck, CPA

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