GASB statement 51

GASB Statement No . 51

The GASB Statement No . 51 is also known as the Accounting and Financial Reporting for Intangible Assets . The Statement was issued on July 10 2007 , but will be effective for financial statements reporting for periods after June 15 , 2009 (Governmental Accounting Standards Board 2007

The Governmental Accounting Standards Board says that the primary aim this statement includes providing users of financial statements with a "more complete and comparable information " regarding intangible assets The GASB adds that the Statement improves financial reporting by reducing inconsistencies in accounting and

financial reporting for intangible assets by clarifying that such assets should be classified as capital assets . The GASB also sees that the Statement promotes "greater comparability " among financial statements of government units and results in a more credible representation of the service capacity of intangible assets , as well as the periodic cost associated with the usage of such , and ultimately , the financial position of these units (Governmental Accounting Standards Board , 2007

According to the GASB Project Page on this Statement , the GASB conducted a survey on existing practice on intangible asset reporting in 2004 . The GASB staff analyzed the responses and later affirmed that there were differences in accounting and financial reporting of intangible assets . Glenn Cheney at Web CPA adds that the inconsistencies came after the GASB issued Statement No . 34 , guidelines for State and Local governments . Cheney explains that it overhauled governmental accounting and capitalized intangible assets . The Statement was , however , silent on the definition of intangible assets as well as reportorial procedures (Cheney , 2007

As a result , part of the project 's initial mandate was to provide a clear criteria for recognition of intangible assets , basis of measurements , classification as capital or non-capital assets , among other things (Governmental Accounting Standards Board , 2007

The Statement affects and amends GASB Statement No . 34 , paragraph 19 and paragraph 21 , and GASB Statement No . 42 , paragraph 9e , paragraph 16 and paragraph 18 . It is currently not affected by any other GASB pronouncements (Governmental Accounting Standards Board , 2007

The GASB Statement No . 51 expands on the reporting requirements regarding intangible assets as stated in GASB Statement No . 34 . It , in fact , clarifies just what an intangible assets really is , and what should be the method of reporting regarding different kinds of intangible assets (Governmental Accounting Standards Board , 2007

GASB Statement No . 51 defines intangible assets as nonfinancial assets which lacks physical substance and has an initial useful life of more than one reporting period (Deloitte , 2007

Glenn Cheney , writing for WebCPA , states that the following are included as intangible assets

easements

internally generated and third-party computer software

water and timber rights

patents , and

trademarks

According to Christopher Ray (2007 , since all intangible assets subject to this statement are to be classified as capital assets , then the existing rules related to capital assets should be applied to intangible assets as set forth in both GASB Statements No . 34 and No 42

Ray also explains that the only scope exceptions will be those...