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Future Accounting Standard Changes <br /> The following Governmental Accounting Standards Board (GASB) Statements have been issued and may have an impact <br /> on future the Utilities financial statements: (1) <br /> GASB Statement No. 83- Certain Asset Retirement Obligations <br /> Summary <br /> This Statement addresses accounting and financial reporting for certain asset retirement obligations(AROs).An ARO is a <br /> legally enforceable liability associated with the retirement of a tangible capital asset. A government that has legal <br /> obligations to perform future asset retirement activities related to its tangible capital assets should recognize a liability <br /> based on the guidance in this Statement. <br /> This Statement establishes criteria for determining the timing and pattern of recognition of a liability and a corresponding <br /> deferred outflow of resources for AROs. This Statement requires that recognition occur when the liability is both incurred <br /> and reasonably estimable. The determination of when the liability is incurred should be based on the occurrence of <br /> external laws, regulations, contracts, or court judgments, together with the occurrence of an internal event that obligates a <br /> government to perform asset retirement activities. Laws and regulations may require governments to take specific actions <br /> to retire certain tangible capital assets at the end of the useful lives of those capital assets, such as decommissioning <br /> nuclear reactors and dismantling and removing sewage treatment plants. Other obligations to retire tangible capital assets <br /> may arise from contracts or court judgments. Internal obligating events include the occurrence of contamination, placing <br /> into operation a tangible capital asset that is required to be retired, abandoning a tangible capital asset before it is placed <br /> into operation, or acquiring a tangible capital asset that has an existing ARO. <br /> This Statement requires the measurement of an ARO to be based on the best estimate of the current value of outlays <br /> expected to be incurred. The best estimate should include probability weighting of all potential outcomes, when such <br /> information is available or can be obtained at reasonable cost. If probability weighting is not feasible at reasonable cost, <br /> the most likely amount should be used. This Statement requires that a deferred outflow of resources associated with an <br /> ARO be measured at the amount of the corresponding liability upon initial measurement. <br /> This Statement requires the current value of a government's AROs to be adjusted for the effects of general inflation or <br /> deflation at least annually. In addition, it requires a government to evaluate all relevant factors at least annually to <br /> determine whether the effects of one or more of the factors are expected to significantly change the estimated asset <br /> retirement outlays.A government should remeasure an ARO only when the result of the evaluation indicates there is a <br /> significant change in the estimated outlays. The deferred outflows of resources should be reduced and recognized as <br /> outflows of resources (for example, as an expense) in a systematic and rational manner over the estimated useful life of <br /> the tangible capital asset. <br /> A government may have a minority share (less than 50 percent) of ownership interest in a jointly owned tangible capital <br /> asset in which a nongovernmental entity is the majority owner and reports its ARO in accordance with the guidance of <br /> another recognized accounting standards setter. Additionally, a government may have a minority share of ownership <br /> interest in a jointly owned tangible capital asset in which no joint owner has a majority ownership, and a nongovernmental <br /> joint owner that has operational responsibility for the jointly owned tangible capital asset reports the associated ARO in <br /> accordance with the guidance of another recognized accounting standards setter. In both situations, the government's <br /> minority share of an ARO should be reported using the measurement produced by the nongovernmental majority owner or <br /> the nongovernmental minority owner that has operational responsibility, without adjustment to conform to the liability <br /> measurement and recognition requirements of this Statement. <br /> In some cases, governments are legally required to provide funding or other financial assurance for their performance of <br /> asset retirement activities. This Statement requires disclosure of how those funding and assurance requirements are <br /> being met by a government, as well as the amount of any assets restricted for payment of the government's AROs, if not <br /> separately displayed in the financial statements. <br /> This Statement also requires disclosure of information about the nature of a government's AROs, the methods and <br /> assumptions used for the estimates of the liabilities, and the estimated remaining useful life of the associated tangible <br /> capital assets. If an ARO (or portions thereof) has been incurred by a government but is not yet <br /> recognized because it is not reasonably estimable, the government is required to disclose that fact and <br /> the reasons therefor. This Statement requires similar disclosures for a government's minority shares of People <br /> AROs. Process <br /> (;oink <br /> Beyond <br /> 5 \Ll tlibel's <br /> 83 <br />