Implementing GASB 54
Recommendations and Strategies
Phyllis Flowers
February, 2014
GASB is a 4letter word. Do you remember when GASB 34 was the latest statement? And, that now
the number has reach 70 (or perhaps even higher as I write this)?from Bringing You Flowers
November 19, 2013 blog posting.
GASB Statement Number 54 was issued in February, 2009, and was phased in depending on when the
organization's fiscal year begins (no later than the first fiscal year beginning after June 15, 2010). For general
purpose external financial reporting under GAAP, governments are required to follow Statement 54. It
applies to governmental fund types only (not proprietary/enterprise funds as these funds use different
balance sheet accounts that represent Net Position, Restricted and Net Position, Unrestricted). While it
doesn't affect the total amount reported as fund balance, it does change the categories used to describe
the components of fund balance. No more fund balance, unreserved or fund balance, reserved (for example).
The five components of fund balance under GASB 54 are Nonspendable Fund Balance; Restricted Fund
Balance; Committed Fund Balance; Assigned Fund Balance; and Unassigned Fund Balance. I certainly
cannot explain this as well as GFOA and recommend purchasing The New Fund Balance by Stephen J.
Gauthier. All questions relative to the fund balance components applicable to your funds (along
with the fund balance amounts) should be directed to your auditor as this white paper is not
intended to provide that type of advice.
What do they mean?
● Fund Balance, Nonspendable. Inherently nonspendable. Not in spendable form (such as
inventories and prepaid items categories; also a category of assets for resale, longterm notes and
loans receivable, advances to other funds). Segregation of a part of fund balances to indicate that
these items cannot be spent because they are not in spendable form. However, if the proceeds from
the sale of collection of the latter category are restricted, committed, or assigned they should be
included in the restricted, committed, or assigned fund balance components rather than
nonspendable fund balance.
● Fund Balance, Restricted. Externally enforceable limitations on use. Portion of fund balance
representing amounts that are subject to externally enforceable legal restrictions that include those
externally imposed by creditors, grantors, or laws or regulations of other governments, or imposed
by law through constitutional provisions or enabling legislation. Stabilization funds (amounts set
aside for protection from emergencies, revenue shortfalls, and budgetary imbalances; sometimes
called “rainy day”), if formally set aside for use only upon the occurrence of specific circumstances,
would be classified as restricted. Stabilization funds are different from minimum fund balance
requirements (since these requirements/policies do not place a limitation on how the resources can
be spent, they are disclosed in the notes to the financial statements).
● Fund Balance, Committed. Selfimposed limitations set in place prior to the end of the reporting
period (fiscal year). Amounts that can only be used for specific purposes pursuant to constraints
imposed by formal action of the government’s highest level of decisionmaking authority. These
committed amounts cannot be used for any other purpose unless the government removes or
changes the specified use by taking the same type of action (e.g., ordinance, resolution, legislation)
it used to previously commit the amounts. Committed fund balance includes resources committed
to liquidate encumbrances. The formal action to commit fund balance must occur prior to the
end of the reporting period (fiscal year) even if the precise amount is not known at that time.
● Fund Balance, Assigned. Limitation resulting from intended use. Amounts that the government
intends to use for a specific purpose. The intent shall be expressed by the governing body or a body
to which the governing body has delegated authority. The portion of fund balance that will be
used to balance the subsequent year’s budget should also be classified as an assignment
(but cannot exceed the budgeted excess expenditures over revenues; this amount can be
determined by the amount in OpenRDA’s Fund BalanceBudgetary Control Code account).
Assignment includes resources that will be used to liquidate encumbrances related to purchase
orders payable from assigned resources. Stabilization funds should not be reported as assigned
fund balance. The General Fund may report an assigned fund balance only if it does not
result in a deficit unassigned fund balance (i.e., cannot be a debit balance). Assigned fund
balance actions may occur after the end of the reporting (fiscal) period.
● Fund Balance, Unassigned. Residual net resources. The difference between the total fund
balance in a governmental fund and its nonspendable, restricted, committed, and assigned
components (i.e., the remainder of fund balance). Only the General Fund may report positive
amounts (credits) for unassigned fund balance. Other governmental funds may report negative
amounts (debits) for unassigned fund balance when nonspendable, restricted, and committed fund
balance is in excess of total fund balance for the fund.
If your organization is using RDA’s standard balance sheet codes, the GASB 54 codes are listed below:
762 FUND BALANCEUNASSIGNED
763 FUND BALANCECOMMITTED
765 FUND BALANCEASSIGNED
766 FUND BALANCENONSPENDABLE
767 FUND BALANCERESTRICTED
We repurposed the three RDA standard codes that were in use prior to GASB 54, mapping them to the new
reference type it most closely resembled. These are listed below:
762 FUND BALANCEUNRESERVED
763 FUND BALANCERESERVED
765 FUND BALANCEUNRESERVED, DESIGNATED
We also maintain standards for Georgia. The new GASB 54 Codes are:
135100 FUND BALANCENONSPENDABLE
135200 FUND BALANCERESTRICTED
135300 FUND BALANCECOMMITTED
135400 FUND BALANCEASSIGNED
135500 FUND BALANCEUNASSIGNED
Please note that with the 6digit Georgia standards, you can have more detail; for example, 135110 for
Nonspendable (Prepaids); 135115 for Nonspendable (Inventory); 135120 for Nonspendable (LongTerm
Notes). This allows the accounts to be “rolled up” into 135100. The other Fund Balance codes can be
broken down into more detail as well (for example, for the committed or assigned, you may want to indicate
different commitments or assignments).
If you wish to implement the GASB 54 codes, the steps are as follows:
1. Print the Trial Balance with Beginning Balance for the current fiscal year.
2. Query G/L Account Masters. Range on Reference Type (FUND BALANCE to FUND BALANCE~).
Print the contents of the browse and note the codes and their current reference type.
3. Ignore the FUND BALANCEBUDGETARY CONTROL codes as this balance sheet account is for
appropriation and estimated revenue control and are not true equity codes.
4. Access System Administration, Report Generation / Devices. Under the FINMGT module, locate
the PURGEFINBREF report and execute it (there is no range screen). This will delete all reference
types.
5. From System Administration, access Version Control. Click the Update Financial Mgt process on
the taskbar. Do not Select All. Instead scroll down to the resource that is labeled STANDARD
FINBREF RECORDS (this is located somewhere around resource number 210 to 215). Highlight it
and click the Select button (this will recreate all standard balance sheet reference types including
those for GASB 54).
6. Access Financial Management. From the Resource Bar, go to Setup, Financial Management
Setup, Standard Balance Sheet Codes, Maintain. Referring to the appropriate list (on page 1 of this
white paper), edit the Name of the standard balance sheet code and select the reference type (for
those that can be repurposed); otherwise, create new ones with the appropriate reference type. We
have a resource for creating standard balance sheet codes in mass, but it is strictly for use by new
customers; not existing ones. If you do not follow the RDA Standards or the Georgia Standards,
you must arrive at your own numbering system (you should, of course, check to see if your state
has specific codes).
7. Refer to your last audit (CAFR) to see which fund balance components your auditor used for your
governmental fund types. If you cannot determine this from the audit, contact your auditor for advice
and guidance. RDA cannot provide this type of advice.
8. Access the G/L account masters for the fund balance codes and make the same changes. In some
cases, you will need to add new balance sheet accounts with the appropriate reference type. Do
this based on your review of the organization’s last audit and discussion with your auditor as all fund
balance components do not necessarily apply to a particular fund. For example, if you are a
Georgia government and have a Emergency 911 Fund, you would not use Assigned but would use
Restricted and Unassigned (and you would only use Unassigned to report a negative fund balance
in that fund).
9. Use the Add Beginning Balance process (from Maintenance, Financial Years/Current Month, New
Year) to “move” beginning fund balances for the current fiscal year to the fund’s appropriate fund
balance component(s). This should be done based on your last audit and discussion with your
auditor.
10. When setting beginning balances for new year based on ending balances for prior year, you should
always do this by fund since the same fund balance components do not apply to all funds.
However, as long as each governmental type fund has the Fund BalanceUnassigned balance sheet
code, you could use that code for all funds and then use the Add Beginning Balance process (see
step 9) to “move” amounts to the fund’s appropriate fund balance code(s).