The Federal Accounting Standards Advisory Board issued a standard on Friday regarding accounting and financial reporting for government-owned land and delayed the effective date due to the pandemic. The organization is aiming to provide more consistent accounting methods and reporting for land holdings.
Before the FASAB released this statement, federal accounting standards required the capitalization of the historical cost of general property, plant, and equipment (G-PP&E) land as well as disclosures regarding restrictions on the use or convertibility of G-PP&E to include G-PP&E land. Federal requirements also required the expensing of stewardship land (SL) for the period in which the acquisition cost was incurred and the disclosures on the relationship between physical units of SL before this statement.
The statement’s principal requirements include:
- Reclassifying G-PP&E land and permanent land rights as a non-capitalized asset
- Referencing a note on the balance sheet that discloses information about G-PP&E land and permanent land rights without an asset dollar amount
- Reporting estimated acres of G-PP&E land and SL using three predominant use sub-categories
- Conservation and preservation land
- Operational land
- Commercial use land
- Reporting estimated acres of land held for disposable or exchange
- Reporting land rights information, whether such rights are permanent or temporary, and amounts paid during the year to maintain such rights
“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 George Scott, chairman of the FASAB, 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 before transitioning to disclosures.”
The FASAB is allowing both accountants and federal government agencies to delay the implementation of these new standards due to the ongoing pandemic. The agency joins other organizations such as the Financial Accounting Standards Board, the Governmental Accounting Standards Board, and the International Accounting Standards Board in the delaying of standards due to the coronavirus. 