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City of Elk River <br />Emerging Issues <br /> <br /> <br />25 <br />Accounting Standard Update – GASB Statement No. 102 – Certain Risk Disclosures <br />The objective of this Statement is to provide users of government financial statements with <br />information about risks related to a government's vulnerabilities due to certain concentrations or <br />constraints that is essential to their analyses for making decisions or assessing accountability. <br /> <br />This Statement provides definitions for concentration and constraint. A concentration as a lack of <br />diversity related to an aspect of a significant inflow of resources or outflow of resources. A <br />constraint is a limitation imposed on a government by an external party or by formal action of the <br />government's highest level of decision-making authority. <br /> <br />This Statement requires a government to assess whether a concentration or constraint could present <br />a risk of financial difficulty. The City will need to make a disclosure in the notes to the financial <br />statements if all three of the following criteria are true: <br /> <br />• The City knows about the concentration or constraint prior to financial statement issuance. <br />• The concentration or constraint makes the City vulnerable to risk of a substantial impact. <br />• An event or events associated with the concentration or constraint that could cause a <br />substantial impact have either (1) happened; (2) started to happen; or (3) are more likely <br />than not to start happening within 12 months of the financial statements being issued. <br /> <br />If a government determines the above criteria for disclosure have been met, it should disclose <br />information in notes to financial statements in sufficient detail to enable users of financial <br />statements to understand the nature of the circumstances disclosed and the government's <br />vulnerability to the risk of a substantial impact. Disclosures are required for the government as a <br />whole as well as any opinion unit in the financial statements that includes outstanding revenue debt. <br />Disclosures can be combined to avoid unnecessary duplication (e.g., a subsequent event footnote). <br /> <br />GASB Statement No. 102 is effective for fiscal years beginning after June 15, 2024. Earlier <br />application is encouraged. <br /> <br />Information provided above was obtained from www.gasb.org. <br /> <br />Page 400 of 637