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Future Accounting Standard Changes (Continued) <br /> This Statement also requires that a component unit in which a government has a 100 percent equity interest account for <br /> its assets, deferred outflows of resources, liabilities, and deferred inflows of resources at acquisition value at the date the <br /> government acquired a 100 percent equity interest in the component unit. Transactions presented in flows statements of <br /> the component unit in that circumstance should include only transactions that occurred subsequent to the acquisition. <br /> Effective Date and Transition <br /> The requirements of this Statement are effective for reporting periods beginning after December 15, 2018. Earlier <br /> application is encouraged. The requirements should be applied retroactively, except for the provisions related to(1) <br /> reporting a majority equity interest in a component unit and (2) reporting a component unit if the government acquires a <br /> 100 percent equity interest. Those provisions should be applied on a prospective basis. <br /> How the Changes in This Statement Will Improve Accounting and Financial Reporting <br /> The requirements of this Statement will improve financial reporting by providing users of financial statements with <br /> essential information related to presentation of majority equity interests in legally separate organizations that previously <br /> was reported inconsistently. In addition, requiring reporting of information about component units if the government <br /> acquires a 100 percent equity interest provides information about the cost of services to be provided by the component <br /> unit in relation to the consideration provided to acquire the component unit. <br /> (1) Note. From GASB Pronouncements Summaries. Copyright 2018 by the Financial Accounting Foundation, 401 Merritt 7, <br /> Norwalk, CT 06856, USA, and is reproduced with permission. <br /> Restriction on Use <br /> This communication is intended solely for the information and use of the Public Utilities Commission, City Council, <br /> management, and the Minnesota Office of the State Auditor and is not intended to be and should not be used by anyone <br /> other than these specified parties. <br /> The comments and recommendations in this report are purely constructive in nature, and should be read in this context. <br /> Our audit would not necessarily disclose all weaknesses in the system because it was based on selected tests of <br /> accounting records and related data. <br /> If you have any questions or wish to discuss any of the items contained in this letter, please feel free to contact us at your <br /> convenience. We wish to thank you for the opportunity to be of service and for the courtesy and cooperation extended to <br /> us by your staff. <br /> 0a41) f <br /> �irthei <br /> ABDO, EICK&MEYERS, LLP <br /> Minneapolis, Minnesota <br /> April 2, 2019 <br /> People <br /> +Process. <br /> Going <br /> Beyond t her <br /> 9 tfibers <br /> 87 <br />