The Governmental Accounting Standards Board issued a guidance Thursday to provide clarity about how certain component units incorporated as not-for-profit corporations should be presented in the financial statements of the primary state or local government.
While the guidance applies to a limited number of governmental units, such as public hospitals, GASB aims for it to enhance the comparability of financial statements among those units and improve the value of this information for users of state and local government financial statements.
The requirements of the statement are effective for reporting periods beginning after June 15, 2016, with earlier application encouraged.