The Governmental Accounting Standards Board has issued a statement that requires government endowments to report their land and other real estate investments at fair value.
GASB Statement No. 52, "Land and Other Real Estate Held as Investments by Endowments," is intended to create consistency in reporting among similar entities that invest resources to generate income. It is effective for financial statements for periods beginning after June 15, 2008, but can be applied sooner.
Prior to Statement 52, state and local government endowments had to report land and other real estate held as investments at historical cost, providing information on investment results only in the year the investments are sold. However, entities that perform investment functions similar to endowments, such as pension plans, have been required to report land and other real estate investments at fair value.
Statement 52 requires governments to report the changes in fair value as investment income. They are also required to disclose the methods and significant assumptions they have employed to determine fair value, as well as provide other information they currently present for other investments reported at fair value.
