Local Governments – What is GASB 54?
GASB 54 – The New Fund Balance Reporting Requirements
Effective for periods beginning after June 15, 2010 (i.e. calendar year 2011)
NONSPENDABLE Fund Balance
Not in spendable form, cannot ever be spent (i.e. prepaid expenses).
RESTRICTED Fund Balance Externally imposed by creditors OR legally enforceable by outside parties.
COMMITTED Fund Balance
Only can be used for specific purpose pursuant to constraints by formal action of highest level of decision-making authority. Important - Action has to take place prior to the end of reporting period but amount can be determined after year end. The committed fund balance can be changed by formal action of highest level of decision making authority.
ASSIGNED Fund Balance
Constrained by intent to be used for specific purpose. Intent can be by governing board OR by someone delegated authority to assign amounts. All remaining amounts in governmental fund other than general are part of the assigned fund balance.
UNASSIGNED Fund Balance
Residual in the general fund or negatives in other funds.