The Federal Accounting Standards Advisory Board released a standard Friday for accounting and financial reporting on government-owned land and delayed the effective date due to the pandemic.
Statement of Federal Financial Accounting Standards (SFFAS) 59, “Accounting and Reporting of Government Land,” aims to provide more consistent accounting treatment and reporting for land holdings. The statement requires reclassifying general property, plant and equipment (G-PP&E) land as a noncapitalized asset. It also clarifies the definition of the stewardship land (SL) category. In addition, it requires reporting of G-PP&E land and SL via three main use subcategories: conservation and preservation land, operational land and commercial use land. The standard also requires consistent and comparable disclosures of information for land, specifically reporting estimated acres of land, estimated acres of land held-for-disposal or exchange, and predominant land use.
FASAB is allowing accountants and federal government agencies additional time to implement the new standard because of the COVID-19 pandemic. Other standard-setters such as the Financial Accounting Standards Board, the Governmental Accounting Standards Board and the International Accounting Standards Board have also been delaying the effective dates of many of their standards since last year as a result of the pandemic. The growing threat from the highly transmissible Delta variant is adding fresh impetus for delayed deadlines for implementing new standards this year as well.
“The board believes that these requirements address concerns that the stewardship and operating performance reporting objectives and qualitative characteristics such as relevance and comparability are not being met,” said FASAB chairman George A. Scott in a statement. “Balancing preparer concerns and user needs, the board agreed to adopt a transitional approach wherein the changes will initially be presented as required supplementary information (RSI) before transitioning to disclosures. After receiving additional feedback from the preparer community and considering the impact of the COVID-19 pandemic on agencies’ ability to implement this statement, the board recognized that additional implementation time was needed. Accordingly, the board delayed the statement’s effective date by one year and allowed information to be presented as RSI for fiscal years 2022 through 2025. In fiscal year 2026, RSI will transition to note disclosures along with the removal of G-PP&E land and permanent land rights from the balance sheet. The board believes that the extension and four-year transition period should allow adequate time to identify and address implementation challenges, including any cost-benefit considerations, while it is reported as RSI.”
SFFAS 59 is available at https://fasab.gov/accounting-standards/.
