GASB Update #81 – Guidance for Irrevocable Split-Interest Agreements

Through a charitable remainder trust or some other irrevocable split-interest agreement, a donor may wish to provide resources to various beneficiaries, including a government, without reserving or conferring the right to terminate the agreement. Government-supported colleges, libraries, zoos, museums and hospitals are common beneficiaries in these agreements.

In response, the Governmental Accounting Standards Board (GASB) issued Statement No. 81 – Irrevocable Split-Interest Agreements – in March 2016 to provide more specific guidance for recognizing benefits from such agreements in financial statements. 

Statement No. 81 supersedes Implementation Guide No. 2015-1, Question 7.72.11. Statement No. 81 also amends provisions contained in Statement No. 31 – Accounting and Financial Reporting for Certain Investments and for External Investment Pools (paragraph 13); Statement No. 33 – Accounting and Financial Reporting for Nonexchange Transactions (paragraph 5); Statement No. 34 – Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments (paragraphs 16, 18, 22, 92 and 107); and Statement No. 67 – Financial Reporting for Pension Plans(paragraph 24).

To read the full insights piece on this final statement, as well as any other GASB updates, download our GASB Insights for information and insight into all of the most recent updates released by the GASB.