Name: Live Webinar: GASB 103 in Action: Insights for Public Sector Leaders
Uploaded: 2025-09-25T18:30:16.372Z
Duration: 1 h 30 min 8 s
Description: Live Webinar: GASB 103 in Action: Insights for Public Sector Leaders

Transcript for "Live Webinar: GASB 103 in Action: Insights for Public Sector Leaders": Good afternoon, and welcome to our live webinar, GASB one zero three in action, insights for public sector leaders, hosted by PKF OConnor Davies. Before we get started, I'd like to go over a few housekeeping items so you know how to participate in today's call. We're pleased to offer live closed captioning throughout the webinar. To access the captions, please use the stream text link located in the chat section of your attendee panel. You will have the opportunity to present I'm sorry, to submit text questions to today's presenters by clicking on the q and a tab on the right hand panel. You may send in your questions at any time during the webcast. We have a lot of material to cover, and if time permits, we will make an effort to respond. If we cannot get to your questions, a response will be sent post event. This webinar is offering one CPE credit in accounting governmental. Polling questions will be launched in the polls tab on your right hand panel, and you will need to respond to three of the polling questions to receive credit. Polling questions will only appear as they launch. Please pay special attention as these polls will be launched periodically. CPU certificates will be issued within eight to ten days via email. Please also note that a copy of the PowerPoint slides and a recording of today's webinar will be made available to you via email four business days post event. As we near the end of the webinar, we do have a very short survey which will be prompted, and your response is greatly appreciated. At this time, I would like to introduce Scott Clellan, partner with our public sector services. Scott. Thank you, Alon. I appreciate the introduction, and good good afternoon, everyone. We appreciate you all taking the time to, spend an hour with us to go over the important aspects of GASB one zero three, the financial statement reporting model improvements, which will affect most of you, starting with the 06/30/2026 fiscal year ends. So we're one year out, but it's a good time to start planning going forward. And, before I get started, I'd also want to, introduce my co presenter, Catherine Patnoid, Patnoid, which will be, addressing some of the issues as well. Unfortunately, Michelle Yen, had a had a, an issue come up and will not be presenting with us. So Catherine and I will be doing the entire presentation. And, again, use the tab in the upper right to ask any questions. So what's the purpose of one zero three? Well, many of you remember back in 1999, we all had to deal with statement 34. And statement 34 in my mind was a significant change from what we were used to in terms of reporting model, and it took a while for all of us to get used to all the new requirements and MD and A, new footnote requirements and so forth. So since it's been a while, the GASB felt it was important to take a fresh look at that. And I'm happy to report that at least it's going to be some enhancements, not a complete overhaul. When this was started to be talked about about three, four years ago, I started to think about retirement a lot sooner than I'm going to have to because it sounded like they were gonna take a complete overhaul and make this a clean slate in front of a brand new, model. However, after years of deliberation and stakeholders writing in and accounting firms writing in, they felt the existing model still worked and they felt it just needs to have some enhancements, which is really what we're gonna focus on as part of today's presentation. So what are the areas that the, GASB focused on? They focused on the management's discussion analysis and changing in the way the format and expectations for what's in the management discussion and analysis. They came up with a terminology for unusual and frequent items. The third bullet is a presentation of proprietary fund financial statements and how to present the revenues, expenses, and changes in fund net position. There's a couple minor changes in how that schedule is presented, discussion regarding major component unit information, changes the way the budgetary comparison information is going to be presented, and then also a little bit with financial trend information in the statistical section. One note, the unusual and infrequent items is really replacing what we in the accounting field were used to either calling extraordinary items or special items. So what are we used to in the management discussion? It's still gonna be presented as required supplementary information. It should be an easily readable analysis in plain language, and it always will show the current year balances and results of operations with compared to the prior year, obviously, with emphasis on the current year. I I think with the management discussion analysis through GASB you're trying to get to get through with this is that a couple things that are important to note. One is they want more time spent giving better explanations as to changes or fluctuations between the various balances between the fiscal years and results of operations. I'm at fault as well. I think that right now we look at an MDA and we say that something changed because of, you know, an increase in another expense. Well, they really wanna know why and get more specific into getting into the detail to make this much more readable for those that are using the financial statements. What has really changed in 01/2003? The topics that are now gonna be presented and only permitted in 01/2003 are gonna be given overview of the financial statements by describing the government wide, the funds, fiduciary funds, etcetera, provide a financial summary like we do today, a detailed analysis of the various operations and funds, significant capital assets and long term financing activity, and then any any currently known facts, decisions, or conditions. Appendix c to GASB one zero three has a real good sample that you can utilize that gives you pretty much everything that's required. Now what's missing that we've had in previous MDNAs? The big takeaways from one zero three is number one, there's no mention in this slide of variances, budgetary variances or budget to actual variances. The reason being is that Catherine's gonna talk about where they're gonna be presented in the future. They're actually gonna be moved to a different location when the within the report as part of the required supplementary information where you present the budget versus actual. And the reason being is that the GASB board felt it was more appropriate to include those and the analytics and facts and conditions as part of the RSI with the budgetary schedules because that's where the information is being presented as opposed to keeping it in the MD and A. It's also important to note in the MD and A, there should be no duplication of effort between what's presented there and what's presented in the transmittal letter. The MD and A should really focus on the financial numbers and the transmittal letter focuses on various other aspects of the entity as a whole. The next page is just an overview which is reinforced in the GASB one zero three as to what makes up the government wide financial statements and what funds follow. So you have the government wide financial statements broken down into governmental activities and business type. And then in certain cases, you may have a discretely presented component unit. I don't see them that much. My colleges will have foundations, which are presented as component units. So what GASB one zero three is coming up with is another way to present those compute component units, which I will talk about in the future. The government activities are broken down into governmental funds and internal service funds. The business types broken down into enterprise funds, and then you have notes to the financial statements. So nothing really new there. The only thing that's gonna be specifically different is when we talk about presentation of component units. Other items mentioned in the MD and A is they like to see charts, graphs, and tables are encouraged. I already mentioned avoiding the duplication. And, again, the primary focus should always be on the primary government and also include any descript any discretely presented component units if they are significant. In addition, on the next slide, it should be only condensed information in the government from the government wide financial statements. You're not gonna list all the information that's presented in the detailed financial statements. And again, the focus should be on the current year, comparing your current year to the prior year, focus on current year in both governmental activities and business activities separately. The elements presented should support the analysis of financial position and results of operations, and I'm gonna go through a couple examples of that in the future. Next slide presents some additional information, which is not that much different from what we're used to, but there's a current couple things that are important to note. One is your long term liabilities must agree to the note disclosure combining both the amounts due within one year and amounts due in more than one year. I've seen ACFRs provided to us or in preparation from our staff where the long term piece is the only piece shown in the long term. What GASB has clarified is they want that long term liability component in the MD and A to include the amount due within one year and the amounts due in more than one year. And I'll point that out on a slide in a few minutes. They still want the general revenues by major source. And then we're adding unusual or frequent items should present inflows and outflows related to each item separately and not be netted. I'll be going over unusual, unfrequent items in a little bit as well, and we'll talk about what normally we see or consider as unusual or infrequent. So in preparing the financial summary within the MD and A, a lot of this is gonna be familiar with what you're used to providing right now. You're gonna have tables in the MD and A to include a statement of net position and a condensed statement of activities. It's going to include total assets, which are gonna require to distinguish between capital and other assets. And then your capital assets are usually broken down between depreciable and non depreciable. Your total deferred outflows of resources followed by your total liabilities, distinct distinguishing between long term and other liabilities, then deferred outflow inflows of resources, and then your total net position distinguishing between the net investment in capital assets restricted and unrestricted net position. So that pretty much represents what we're used to right now seeing in MD and A for the, balance sheet or net position side of it. And then you'll have the statement of activities, which basically represents the program revenues by major source. Again, distinguishing between what we're used to charges for services, operating grants and contributions, and capital grants and contributions, followed by your general resources, your general revenues, then your total revenues, then your program expenses broken down by function, then total expenses, and then your excess prior to any contributions for term or permanent endowments, permanent fund principal transfers, and then unusual or frequent items. Next classification would be any contributions to term or permanent balance, then transfers, then unusual or infrequent items, then you're beginning that position, change in that position, and ending that position. One thing to keep in mind, if you do have a restatement of a prior year net position following GASB 100, that would go under number 15. You'd have a beginning net position as stated in the prior year audit, then you'd have the result of your statement, and then you'd have the beginning balance as restated. So that's a little bit of a change than you might you'd be used to seeing now. I think in the past before GASB 100 came out, we were just saying beginning balance as restated. Now you have to show three different lines to show how it was restated on the actual, statement of activities or changes in that position. The next slide really just shows and clarifies that the long term liabilities again, the long term liabilities as highlighted in pink and then you see the numbers in the light blue for governmental and then the yellow for the business type, that's reinforcing that that number should agree to the total of your footnote where you show your long term liability roll forward. It should agree to the total number, and it would include the short term and the long term. The other liabilities would be would be everything outside that table representing other liabilities and not the long term in nature. The next slide shows that footnote and to how they reconcile or tie to one another. So, again, nothing new. Just, again, a clarification to show how those numbers should be tying out as opposed to maybe the way we're doing it in the past. Again, these two slides that I have up here represent what we're pretty much used to seeing on the, net position balance sheet side of things. And then next two slides are, again, additional slides that show a condensed version of the statement of activities. And, again, not much different from what we're used to seeing from what we've seen in the past. And the next slide just gives some samples out of GASB one zero three where it presents the use of charts and tables. We have some clients that include tables in the charts. You don't have to, but it's encouraged in the, one zero three GASB presentation. With that, we're gonna launch our first poll. So, again, make sure that you address and answer the questions so you get appropriate credits. There are gonna be four total launched of which you need to answer three of them. And at this time, I'm gonna turn the presentation over to Catherine. Alright. Thank you, Scott. We did have a question, that came in. Does the standard give specific examples of the types of charts, graphs, tables to be included in the mDNA? So Scott kinda just went over that that, yes, GASB does have some examples which we've included in our presentation. And like he mentioned, we do have or GASB has provided an appendix c of the standard, a full example of the mDNA. So there are some examples in there as well. This graph this slide just shows a sample of graphs that you could use in your mDNA. So I'll start by going over the next section, the detailed analysis. This is split into two sections, the government wide section where you'll discuss the primary government's financial position and results of operations, and you'll summarize significant changes in both governmental activities and business type activities. So you may have some discussion of balance sheet lines here, but the primary focus is really going to be those results from operations. The second section is the major fund analysis where you'll discuss the fund balance or net position and the results of operations summarizing significant changes in those major funds. And just note that it's only major funds you're discussing, no discussion of non major. If applicable, you can make a reference to the analysis of significant capital assets and significant long term liabilities, but in this section, it's just going to be a high level mention. The detail will be in a separate section. So in addition to reporting the amounts or percentages of the significant changes, your analysis should explain why and indicate the magnitude of those changes. So like Scott said, that's really the focus, that the GASB wanted, making sure we're explaining why something changed, not just what the dollar amount was. So your analysis should include facts, decisions, or conditions about which the user may not be aware, also with the understanding that not all users may be from the government's geographic area. So for the government wide analysis, you should include a discussion of significant policy changes, such as changes in tax rates or fees, or the imposition of a hiring freeze, and also important economic factors, such as changes in the tax or employment basis, anything that significantly affected operating results for the year. In the major fund analysis, you should address any restrictions, commitments, and assignments that significantly affected the availability of fund resources for future use. This analysis of major funds may focus on explanations that differ from the analysis already included in the government wide analysis. It should not duplicate those. And just wanna reiterate, you're just looking at the significant changes, not all the changes. So an example of this detailed analysis, if you have county sales tax revenues, in this example they grew 3.24%, you can include a chart like this one for further illustration. This one shows the growth in sales tax over the past ten years, with the exception of 2020, when the sales tax declined due to the COVID pandemic. It also discusses that the growth in sales tax has increased since New York State enacted, the Internet enhanced Internet sales tax. So this is really your explanation of the why things changed. You can also include your explanation in bullet points. So in this example, an increase in sales tax of 48,800,000 was due to strong consumer spending early in the year, but flattened as the fiscal year progressed, offset by lower opioid litigation settlement. You could talk about property taxes increased by 28,700,000.0 due to the recognition of the deferred preemptive sales tax in lieu of property taxes. So just really making sure you're answering why those dollar amounts increased or decreased. On the expense side, you might say there was a decrease in public safety expenses due to a 3,000,000 decrease in pension expenses due to a growth in investments of the retirement plan. In the major funds discussion, you're primarily going to discuss what caused the increase or decrease in fund balance in that position. For example, if your general fund fund balance increased 21%, you might say that's due to the increase in property taxes discussed above in that government wide section. There might also be a growth in revenues that you want to discuss such as, increase in building permits due to increased building activity, or maybe there's new tuition from a new pre k program. So moving on to the next section. The next section is a discussion of significant capital assets and long term financing activity. There's no requirement to present a table for either of these, although you certainly could. For capital assets, which includes your intangible assets and the right to use assets, you'll want to talk about significant additions or disposals, also any changes in commitments for acquisitions, any significant policy changes, or any economic factors that are relevant to the current year. And like I said before, make sure you're referring to any detailed analysis rather than duplicating it in multiple sections. For example, you might discuss that construction progress increased 24,000,000 due to the construction of the new high school. You also might discuss that a portion of the sales tax is reserved for road and bridge construction, which provides financing on a pay as you go basis. So really just detailing any of those significant factors. On the long term financing activity, you'll also be discussing anything significant, in debt releases, public private, and public public partnerships if you have any, any significant changes in subscription based information technology arrangements. You'll also want to discuss any changes to credit ratings or debt limitations, any significant policy changes, or any economic factors that are relevant to the current year. So for example, you might say bonds and notes payable increased 8% due to the issuance of 30,000,000 of bonds for the new high school project. You might also note that this was partially offset by scheduled principal payments. You might also want to note the town's bond rating. So for example, the town holds a bond rating of AAA from s and p. The last section of the MD and A is the currently known facts, decisions, or conditions. So currently known refers to information that management is aware of as of the date the financials are issued, and you'll need to include a description of items expected to have a significant effect on financial position or that are expected to produce significant differences from current period results of operations. So here you're really highlighting information that's not allowed to be in the footnotes because it's about information going forward after the financial statement date. So some examples here include trends within the government, the subsequent year's budget, including any factors that were used to develop it such as inflation, changes in union contracts, increases in rates, things like that. You'll also want to discuss any expected changes in budgetary net position or fund balance. If there's any actions related to post employment benefit liabilities, capital asset improvement plans, lessee liabilities, operator liabilities, and PPP arrangements, or spittle liabilities, you'll want to include that as well, or any new legislation or regulations imposed on the government. And again just make sure you're discussing only items that are expected to have a significant effect on the financial position. For example, you might say that the public safety union contract was approved and begins at the start of the next fiscal year. That contains contractual pay rate increases, which cause the public safety budget to increase by a certain amount for that year. You might also say that inflation increased from two and a half to 2.9% and that this increase was factored into the approved budget for the next year. Maybe your town approved a new defined benefit pension plan for the police that begins in the next year, so you might want to describe that arrangement, and probably at this point, the amount of the pension liability isn't determinable, so you'd want to make sure to note that as well. And like I said before, GASB one zero three does have a good mDNA example in appendix c, so that's a great place to start when you're trying to rewrite your mDNA. So now I'll turn it over to Scott for unusual and infrequent items. Thanks, Catherine. Before I get into the, unusual and infrequent items, I do wanna mention a couple things that the GASB considered that left out that would have driven us all probably crazy. They were talking about including a statement of cash flows at the government wide level as well as a cash flows at the governmental fund financial statements, not just in the business type, enterprise funds or internal service funds. So that would have been fun. They also talked about modifications for small governments, which they basically came back and said there's no size threshold. They also talked about changing in natural classifications on the government wide expenses as well as including some new requirements for debt service fund reporting and possibly looking into changing the measurement focus and basis of accounting for governmental funds. So we dodged that and I think basically the the MD and A that Catherine and I just went over and the one zero three that we're going over going forward, I don't think it's gonna be that difficult to implement, compared to maybe what we're dealing with with with Gatsby one zero one. But again, it's something to keep in mind, especially if you're going after the GFOA certificates of excellence in ASBO. They're definitely gonna be looking for these revisions to May to be made as we prepare our first set of financial statements following a new standard in, 06/30/2026. Again, it'll be the first batch that will be going final. There is another question I noticed that if a budget submitted to the government agency like the New Jersey DCA is amended at year end to be more in line with actual revenue and expenditures, will that amended budget be used for the variance analysis and explanations during the audit? Catherine's definitely gonna go through what that schedule would look like, but I definitely would say that would take into account if the DCA comes through and amends it or an agency amends it, that would come through as an adjustment to the original budget, and you would probably show both, on the table. Catherine, do you agree with that? Yes. I would agree with that. Thank you. Okay. So unusual and frequent items, as I mentioned earlier, is basically eliminating extraordinary item definitions as well as special items. Extraordinary items in the past were known as transactions and events that are both unusual and infrequent in occurrence, and special items were transactions and events that are all within the control of management, which is the important differentiating factor, and are either unusual in nature or infrequent in occurrence. So those two terminate terms are no longer gonna be utilized. We're now gonna combine them both into what's known as unusual and infrequent items. Unusual nature as well as the as well as the infrequent items are defined in the definitions in statement 62 paragraph 45 to 49. Basically summarizing it, the unusual nature is an the underlying event or the transaction should possess a very high degree of abnormal of of abnormality and be of a type clearly unrelated to the ordinary and tick typical activities of your government, taking into account the environment in which the government operates. So this has gotta be something very, very unusual. And in frequent, in the definition in statement 62, is not reasonably expected to recur in the foreseeable future taking into account the environment in which the government operates. All items that you identify in a given fiscal year as unusual or infrequent should be presented separately in the financial statements regardless of regardless of whether the item was within the control of management. That's no longer applicable when you're identifying an unusual or infrequent item. And your footnotes should disclose the program function and the identifiable activity and whether the item is within the control of management. Some examples of where something could be unusual and infrequent, capital asset impairment. One of my clients just recently had built up a significant amount of capital improvement I'm not sorry. Construction in progress. And when we're gonna do the audit this year, they came back to us and said, we have to scrap this project. We have to write it off. So that to me would be an unusual or a frequent item that would have to be addressed separately in the auto report. Significant damage resulting from a natural disaster, the sale of a significant asset, any significant legal settlements, some that we see is when there's, pollution remediation settlement would obviously be unusual and infrequent in most cases, and any very significant or large donations. As I mentioned earlier, when going over the MD and A, when you present the statement of activities, you're going to present the general revenues, then any transfers between funds, and then you're going to include unusual or infrequent items. In this example, in GASB one zero three, they use flood damage. And they included grant revenues and also cleanup expenses as a noodle unusual items. And then note the header just below the cleanup, it includes total general revenues, transfers, and unusual or infrequent items before the change in financial position. So that's really where you would put anything that's considered unusual and infrequent in the statement of activities. In the actual fund level schedules, in the statement of revenues, expenditures, and changes in fund balance, same scenario here. You would show your revenues and your expenditures, then your other financing and sources and uses like we have forever, and then you will introduce the unusual or infrequent item as a separate item. And then you you would show your net change in fund balances. The next example from 01/2003 shows a simple note disclosure where a town experienced a roof leak during November 2025 resulting from significant rainfall. This was considered a catastrophic event outside the control management. The town incurred costs during the current year of 09/1954 09/4000 to clean up the damage which was attributable to general government support, and then the town received insurance insurance proceeds as a result. So they're asking you to identify something as unusual and infrequent and then disclose what was identified as unusual and frequent, whether management had any control over it, and then any revenues or expenses associated with it as part of the disclosure requirement in 01/2003. Before I move on to the next section, we're gonna launch poll number two. And I'm going to move on to the presentation of the proprietary fund statement of revenues expenses and changing to fund that position and discuss the changes that are taking place as a result of the 01/2003 implementation. So in the current standard, in the presentation of a proprietary fund financial statements, we're still gonna show operating revenues. Operating expenses are still gonna be shown, but it's introducing a new category and that new category is non capital subsidies. Again, important to note, new category but also has to be non capital. So in looking at a New Jersey ACFR, we have food service enterprise fund where we receive reimbursements for federal and state free and reduced lunches. That is now gonna be pulled out of other non operating revenues and expenses and moved up to non capital subsidiaries or subsidies. So that's gonna be a big change in the way things are presented because it'll change your overall operating income and loss to be a different number when you include these non capital subsidies. And then you'll still have your other non operating revenues and expenses. And then, again, if there's any situations where you had an unusual or infrequent item, you would include that as well. We've had situations where we had a hurricane and all the food went bad in the food service program, which rarely happens. And at that point, we considered it, an extraordinary item, but now that would probably call fall under the unusual or frequent items. So again, the big change here is the introduction of a new category, non capital subsidiaries. If it's a capital grant that you receive, that would still be presented where it is today. Again, it's non capital subsidies. A specific example of a presentation in the enterprise fund, you would have your normal operating revenues, your normal operating expenses, and then here's again, would you in insert your non capital subsidies. It could be, again, federal or state revenue coming in for reimbursements or transfers from other funds that are not capital related would also go in that category, in the new model. The next page is the continuation of the previous page and the completion of the operating statement where it shows it will still include non operating revenues and expenses such as interest income, interest expense, any capital contributions, transfers in that are restricted for capital assets, and the gain from the sale of capital assets. Again, non operating, capital. Subsidiary's, non capital. Subsid subsidy's non capital. Just a further definition of operating revenues and expenses to make sure that they're disclosed properly. Your operating revenues and expenses are the revenues and expenses other than non operating, and your revenues or expenses that otherwise would be classified as non operating in most proprietary fund financial statements should be classified as operating revenues or operating expenses if those transactions constitute the prepare proprietary funds principal ongoing operations. For example, if interest revenues should be reported as operating revenues by the proprietary fund established to provide loans for the first time home homeowners. We don't see that type a lot, But if that's the case, then that interest revenue might be included in the operating revenue. What are considered operating revenues expenses? Subsidies received and provided that may be considered as capital, contributions to permanent term endowments, revenues expenses related to a financing, resources from the disposal of a capital asset and inventory, and then investment income and expenses, what you're normally gonna see as your non operating revenues and expenses within a enterprise in an enterprise fund. And just to wrap up this section, they introduced the term subsidies and what they are comprised of. They are resources received from another part of your fund for which the proprietary fund does not provide goods and services to the other part of your fund and that directly or indirectly keep the proprietary funds current or future fees and charges lower than they would be otherwise. Again, that I think fits in perfectly with when you look at a food service program that's in a, non affluent district and they're relying heavily on free and reduced lunch reimbursements, you're running a very big loss by your local sales or in in school district sales compared to the expenses you're incurring to run the program. So your federal and state subsidies would represent a significant portion of making your fund whole and not running in the red. Resources provided to another party if that's the case, and then all other transfers would be considered as subsidies. The next section deals with major component unit information. Not a lot to go over here in terms of, you know, definitions of a component unit and so forth. It's more in line with how do you present a major component unit in the financial statements under one zero three. So in basic in the basic financial statements, governments should present each major component unit separately in a reporting entity statements of net position and activities if it does not reduce the readability of the statements. So for example, on the statement of net position or the statement of activities, if you have one component unit, it would make sense to include it on those specific basic financial statements. However, let's say that an organization has four, five, six component units that will, for the most part, muddy up the presentation of the statement of activities and the statement of net position and make it difficult to or more difficult for the user of the financial statements to get an understanding of the financial statements of the overall entity. So what GASB is saying is that you can put it there, but if it diminishes the understandability of the statement of net position and statement of activities, you are permitted to include a separate schedule. I believe it's right after the fund financial statements as part of the basic financial statements after you present all your individual funds to include a schedule of discretely presented component units to list each component unit separately, come to a total, and then that total will go up to your front basic financial statements. This is basically an example of that where you would include all your material component units on the statement of net position, where you're where you're making decision here that you're gonna include them on the main statement of net position. And they are on the statement of activities. You're presenting all of the component units as separate items on the basic financial statements here. Again, you have the option to include it in the basic. You can include it right after the fund financial statements, but you can no longer or include a financial statement footnote to satisfy that requirement. So again, here is more just presentation of the component unit under one zero three under the new financial reporting model. And before I transfer it back over to Catherine, we're gonna launch poll number three. And there's also a question, your opinion, is there anything that my financial accounting software can do to assist? There I mean, there I've seen software programs right now where you can at least get a good report to isolate it down to what the comp what the items you want to include in your MD and A to isolate the significant items to determine your fluctuation. Also, when Catherine goes through the budgetary comparison information going forward, there are probably ways to manipulate the data to get it into the new format as well as to provide an Excel spreadsheet or something from the software to allow you to determine significant budget comparisons that would require some additional explanation as RSI. Heather, turning it over to you. Alright. Thanks, Scott. So now I'm going to talk about the budgetary comparison information. So the budgetary comparison schedule should be presented as RSI for the general fund and each major special revenue fund that has a legally adopted annual budget. So the change here is that the new standard eliminates the option of reporting budgetary comparison information as a basic financial statement, which was allowed under GASB statement number 34. The reason for this is that budgetary comparison information is essential for placing the basic financial statements and notes into context, and therefore that's why it should be reported as RSI. So you're now required to present separate columns for the variances between the original and final budget amounts as well as the final budget and actual results. In the notes to RSI, you're now required to present an explanation of significant variations between the original and final budget amounts as well as between the final budget and actual results. So this slide shows you a sample of what the budgetary comparison information would look like. This example can be found in GASB 103 if you want to look at the bit larger version. So it shows you both your original and final budget columns with the variance between the two, your, which previously you may have been including, I know in a lot of my clients we show this column is just labeled additional appropriations and transfers. And then you'll also show your actual amounts on the budgetary basis and then the variance column between the actual and the final budget. And the second page just shows the remainder of that schedule. And as usual, this will be shown at your legal level of control. And now this is an example of the notes to budgetary comparison schedules where you'll discuss the significant variances between the budget, and the original and final budget and the budget and actual. So this shows an example of the differences between the original to final budget, where it describes that it was the budget was increased 500,000 for the use of money in property due to an increase in interest rates after the budget was prepared, and then a difference in the final budget to actual where state aid exceeded budgeted amounts as the town was awarded additional grant funding for a new public safety initiative, and that was higher by 324,000. So like the MD and A, you're really describing the why. So some things to keep in mind, if you budgeted extra funds in certain lines like a contingency line to transfer when needed, you'll need to explain that as part of the original to final budget variances. Or if you transfer at year end, to leave budget to actual variances at zero, you'll still need to explain the original to final budget variance. And again, you're only discussing significant variances. You'll want to consult with your auditor on the amount, but I would suggest start looking at variances that are about half a percent to a percent and a half of the budget, just as kind of a starting point. And you're just explaining lines that are shown on the RSI. You do not need to drill down into further detail in your explanation. This just shows an example of the budgetary expenditure variances, and the unusual and infrequent items that were shown. If the other financing sources and uses had any significant variances, you would show them here as well. In this example there is a couple differences in the original budget to final budget for the expenditures, but none of the final budget to actual variances were significant so there's no variances explained here. So really for the budgetary comparison information, the primary change is one, the location of the existing information. The budgetary comparison information, if it was previously considered to be basic financial statements, it's now required to be in the RSI. And the analysis of the variances previously was in the MD and A like Scott mentioned, and it's now in the notes to the RSI. And then if you didn't have it already, you would have the addition of the variance columns as a change. Now we'll talk quickly about the financial trend information in the statistical section, which will be relevant, if you're preparing an ACFAR. In the statistical section of separately issued financial reports for governments engaged only in business type activities like enterprise funds, you should present revenues by major source for their business type activities distinguishing between operating non capital subsidy and other non operating revenues and expenses. So essentially, you're just following the updated terminology and formatting for the proprietary funds. So this just gives you a sample of what that table would look like. If this is changing your presentation, or classification for those proprietary funds, you only need to do this for the current year and any comparative years presented in your basic financial statements. So if you only show one year in your basic financials, you only need to update the presentation for the current year. You don't need to change earlier years that aren't in the basic financials, just explain the inconsistency with the prior years with a note. This just shows the bottom half of that table. So now we'll go over some takeaways, and we'll launch our last polling question here as well. And once we go over the takeaways, we'll answer some of the questions that have come in. So when is this effective? This is effective for fiscal years beginning after 06/15/2025 and all reporting periods thereafter. So for our most common year ends, this will be effective for sixthirtytwenty six and twelvethirty onetwenty six year ends. And earlier application is encouraged, although it's getting a little late for that, so I'm expecting there won't be too much early application here. But if a primary government does choose to early implement this statement all component units of that government should also implement the statement in the same year. So some key takeaways are to start reviewing your presentation format now, so this includes the component units, presenting those major component units separately, proprietary funds, looking at your operating versus non operating, reviewing those groupings, budgetary comparisons, adding in those variance columns if they aren't there, moving them to RSI if they're currently in basic financial statements, and then adding that analysis set up in the notes to RSI. You also want to set up your new MD MDNA format and make sure you're removing any duplications. Also, try to keep track of any significant transactions and events, for disclosure or explanation in the MDNA, and also if there's something you might need to include in unusual or infrequent items. And then just note that there is a materiality box like on all GASB standards that says the provisions of this statement need not be applied to immaterial items. So this is something that GASB and GFOA have really been highlighting recently, because if something's not significant, if it's not material, there's no need to go through the work of implementing it. So things you'll want to look at are, is it quantitative? Is the size significant? And then also qualitative factors such as the nature of the impact and the importance to users. But definitely discuss this with your auditor before making decisions. You'll also want to communicate with departments to determine if users needs are applicable to your entity. So for example, in the MD and A, if there's in the currently known facts or conditions, if there's any other departments that might have useful information, like grants or maybe you've got a tourism department, just something that would be useful for various users. And then all analyses, significant is really key. And lastly, here are some resources that you can use. The GASB's governmental accounting research system always has great resources when you need to look something up. The GASB did put out a video on GASB one zero three you can take a look at, and you can also look take, look at our article we released a couple months ago this year about GASB one zero three. Now Scott would like to join me. We'll go over a couple of the questions that have come in. The first one is, do business type activities have to present major component unit information the same way? Scott, would you like to take that one? Yeah. I think that under the standard, I have certain entities right now that have a budget component units. And as long as they're major and and significant, they should be presented in the same manner. The next question is, what if gap and budgetary results are different which should be shown? So this would be, how we've always been presenting this. My clients currently show their budget versus actual as RSI, and their actual results are in a budgetary basis, which often is different from GAAP, like with the encumbrances aren't in GAAP, but are in budgetary basis. So you do want to show that budgetary basis, and then you would have a reconciliation from the budgetary basis to GAAP, which we also present in our notes to RSI. And, Catherine, we're the same way. We have a budgetary basis financial statements, which would, reflect what's required of one zero three as well with a reconciliation to the GAAP at the bottom of the schedules. So you're really focused on the budgetary base when you're putting together these, budgetary schedules in the new one zero three standard, which really is not much different from the previous standard. And then I guess the last one is what will be the audit testing changes if any due to budgetary comparison section. I would guess the only thing that we would just make sure that your explanations and fluctuations and analysis that you're providing, makes sense because of the way it's being presented now. I don't know if it's gonna change anything significant from an audit testing perspective other than making sure what you provided. I'm sorry. Yeah. I was gonna say, I don't see a significant change. If you're already presenting that in the MDNA, now it's just in a different spot. So we're still looking at it, reviewing it. It's usually part of our testing to look at variances anyway. So I don't see a huge change in that. Catherine, there's one or two more. The one was, can we avoid restating the prior year? And as we talked about yesterday, we don't believe that well, one is Gatsby one zero three is retroactive, so you cannot avoid restating. However, we don't believe that one zero three will result in having to restate like we are dealing with one zero one right now. So one zero three should not result in any additional, restating, and we don't expect to see any. Makes things a little easier. The other question was can, PKF OConnor Davies help with training our staff and setting up timelines and tracking schedules? As long as we're not making the management decisions on behalf of of our clients, we can, by all means, jump in and help with training the staff and and clarifying some of the stuff that we just went over. I don't see any more questions. So, well, there's one. Certain lines of businesses or certain lines of business are challenging to budget for. Can a variance of budget to actual explanation simply be estimates were not accurate based on the nature of the business? See, Catherine, just just so you know, this is an authority that that presents business type, and doesn't have an ACFR. So it would probably be a little bit different in terms of the requirements. So they don't have, like, a formal budget like most of our clients do. It can be modified much more simply. So I would say in his case, in an authority case, you probably can get away with that. At least I I know the entity that this is. And, yes, I would say you probably can do that based upon, your circumstances. Let's say there are certainly entities that don't have legal budgets, especially those business type activities. Like, I have some housing authorities that there's no legal budget, so there would be no RSI budget to present. So that's a possibility as well. That's correct too. I think if you're an authority under business type, you may not have to change all that much from that perspective Right. In terms of the presentation of the legal budget because you don't have one. I don't see any more questions. I think we've launched all four polls. Alon, do you wanna step back in and and wrap it up for us? Perfect. Thanks, Scott. Thank you, Scott and Catherine, and thank you everyone for attending. If you have not completed it already, we have launched our survey located at the survey tab of your panel. Just a reminder that the copy of the PowerPoint slides and a recording of today's webinar will be made available to attendees via email four business days post event. Thank you again, and have a great rest of your day.