GASB77 Brochure pages (PDF)

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Meeting First Year Requirements are Critical to Future Reporting
Establishing a systematic all-encompassing three-step process to comply with GASB 77 in the first year the requirements are in effect is critical
to ensure accurate and timely reporting in the future. Our experienced consultants are adept at evaluating the financial impacts of tax incentive
programs offered at all levels of government.
We believe the most efficient approach to complying with GASB 77 starts with a comprehensive top-down analysis of financial incentive agreements


(as defined by GASB 77) entered into between the reporting government and its incentive-benefiting participants.

Our local government
consultants employ
the following threestep process to
assist governments
with the new
GASB 77 reporting




review of all tax
abatement and
incentive agreements
including those
entered into by
other governments
affecting the reporting
government’s tax

Financial analysis
including both
the government’s
incoming tax revenues
and forgone tax
revenues resulting
from the tax and
incentive agreements
identified in Step 1.

Interface directly
with accountants,
auditors and all
affected levels of
government (i.e. cities,
towns and school
districts), maximizing
the probability for a
successful review
and audit.


Summary of GASB 77

Tax abatement agreements must consist of a

The Governmental Accounting Standards Board’s (GASB) Statement No. 77

commitment by the government to reduce taxes and

“GASB 77” modifies the way state and local governments prepare their financial
statements. GASB’s goal with the new regulations is to provide government


financial statement users with important information about forgone revenue via

action. Disclosure requirements do not apply to

tax abatements and financial incentives in order to assess:




the individual or entity to perform a certain beneficial

statutory or “as-of-right” incentives.

whether a government’s current-year revenues were sufficient to
pay for current-year services (known as interperiod equity),
whether a government complied with finance-related legal and

Reporting governments may choose to disclose

contractual obligations,

entities or individuals or in the aggregate.

where a government’s financial resources come from and how

Reporting government must include tax abatements

it uses them, and
a government’s financial position and economic condition and how


For financial reporting purposes, GASB 77 defines “tax abatement” as

There is no requirement to disclose future-year liability

forgone tax revenues from an agreement between a government and an
and the individual or entity promises to subsequently take a specific

or tax abatements nor tax abatement recipients,

action that contributes to economic development or otherwise benefits

benefits of such tax abatements, or tax abatement
agreement terms.

the government or its citizens. GASB 77 is not intended to determine the
effectiveness of a government’s tax abatement or incentive programs.

that were entered into by other governments that
reduce the reporting government’s tax revenue.

they have changed over time.

individual or entity in which the government promises to forgo tax revenues

information about tax abatement agreements with


Effective for fiscal years beginning after December 15, 2015.

Download GASB77 Brochure pages

GASB77_Brochure_pages.pdf (PDF, 713.41 KB)

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