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City of Centerville June 3, 2009 Page 21 GASB Statement No. 51 -Accounting and Financial Reporting for Intangible Assets This statement was issued in June 2007 and is effective for periods beginning after June t 5, 2009. The new standard characterizes an intangible asset as an asset that lacks physical substance, is nonfinancial in nature, and has an initial useful life extending beyond a single reporting period. Examples of intangible assets include easements, computer software, water rights, timber rights, patents, and trademarks. This statement requires that intangible assets be classified as capital assets (except for those explicitly excluded from the scope of the new standard, such as capital leases). Relevant authoritative guidance for capital assets should be applied to these intangible assets. The statement provides additional guidance that specifically addresses the unique nature of intangible assets, including: • Requiring that an intangible asset be recognized in the statement of net assets only if it is considered identifiable • Establishing aspecified-conditions approach to recognizing intangible assets that are internally generated (for example, patents and copyrights) • Providing guidance on recognizing internally generated computer software • Establishing specific guidance for the amortization of intangible assets. GASB Statement No. 54 -Fund Balance This statement was issued in March of 2009 and is effective for periods beginning after June t 5, 2010. This new standard is intended to improve the usefulness of information provided to financial report uses about fund balance by providing clearer, more structured fund balance classifications, and clarifying the definitions of existing governmental fund types. GASB No. 54 distinguishes fund balance between amounts that are considered non-spendable, such as fund balance associated with inventories, and other amounts that are classified based on the relative strength of the constraints that control the purposes for which specific ammounts can be spent. The following classifications and definitions will be used: • Restricted - ammounts constrained by external parties, constitutional provision, or enabling legislation • Committed - ammounts constrained by a government using its highest level ofdecision-making authority • Assigned - ammounts a government intends to use for a particular purpose • Unassigned - ammounts that are not constrained at all will be reported in the general fund. In addition to the classifications of fund balance, the standard clarified the definitions of individual governmental fund types, for example, special revenue funds, debt service funds, and capital project funds. 952.835.9090 Fax 952.835.326t www:aemcpas.cosn