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GASB 51, Accounting and Financial Reporting for Intangible Assets


The Governmental Accounting Standards Board recently issued GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets. Public Schools possess many different types of assets that may be considered intangible assets, including right-of-way easements, water rights, land or property use rights, and computer software (purchased, licensed, or internally generated). Although GASB Statement 34 included intangible assets within the scope of the term capital assets, this reference has created questions as to whether and when intangible assets should be considered capital assets for financial reporting purposes; as a result, divergences in practice have arisen. GASB 51 clarifies the accounting and financial reporting requirements for intangible assets in order to reduce these inconsistencies.

As a result of this new pronouncement, districts will not only need to ensure they are capitalizing intangible assets going forward, but, in some cases, will need to determine the amounts to be capitalized on a retroactive basis. Exceptions to the retroactive capitalization requirement are smaller districts classified as phase 3 implementers under GASB 34, any internally generated computer software, and intangibles with indefinite useful lives. The pronouncement is effective for periods beginning after June 15, 2009. We encourage you to begin identifying any intangibles required to be capitalized retroactively now to allow sufficient time in accumulating any necessary prior data.

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