The Governmental Accounting Standards Board has issued GASB Statement No. 52, Land and Other Real Estate Held as Investments by Endowments, to establish consistent standards for the reporting of land and other real estate held as investments by essentially similar entities. The Statement requires permanent and term endowments and permanent funds to report the fair value of land and other real estate held as investments and the changes in that fair value. Prior to the issuance of Statement No. 52, accounting standards required permanent and term endowments, which exist to invest resources for the purpose of generating income, to report land and other real estate held as investments at historical cost. In contrast, other entities such as pension and other postemployment benefit plans, external investment pools, and certain deferred compensation plans, which exist for similar income-generating purposes, report land and other real estate held as investments at their fair value. Reporting investments at fair value provides more decision-useful information about their composition, current value, and recent changes in value.
Statement No. 52 also requires governments to report the changes in fair value as investment income. Further, it requires disclosure of the methods and significant assumptions employed to determine fair value, as well as other information that currently is presented for other investments reported at fair value. The requirements of the Statement are effective for financial statements for periods beginning after June 15, 2008. Governments that wish to implement earlier than that date are encouraged to do so. |
