The Governmental Accounting Standards Board released guidance Monday to improve debt-related disclosures in notes to financial statements, including how they address direct borrowings and direct placements.

In Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements, GASB spells out which liabilities governments should include in their note disclosures related to debt. The new standard requires that all debt disclosures present direct borrowings and direct placements of debt separately from other types of debt. Direct borrowings and direct placements could expose a state or local government to risks that differ from those related to other types of debt, GASB pointed out.

Statement 88 also requires state and local governments to disclose additional debt-related information for all types of debt, including the amounts of unused lines of credit, along with the assets that have been pledged as collateral for debt.

State and local governments also will now need to disclose the terms specified in debt agreements related to significant events of default with finance-related consequences, termination events with finance-related consequences, as well as subjective acceleration clauses.

The full text of the new standard plus a high-level overview of it are available on GASB’s website.


GASB logo at headquarters in Norwalk, Connecticut
GASB logo at headquarters in Norwalk, Connecticut Courtesy of GASB

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Michael Cohn

Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, has been covering business and technology for a variety of publications since 1985.