GASB 53 Reporting

GASB 53 requires that governmental entities provide additional disclosure in their financial statements about their use of hedging derivative instruments.  Governmental entities are required to include information about the purpose or objective for entering into the derivative, the terms of the derivative, the net cash flows (if the hedged item is debt) and the risks that the governmental entity is exposed to by its use of the derivative.

DerivActiv helps governmental entities sort through the disclosure requirements and provides governmental entities with sample language for these new disclosures.

MuniMarket Pulse Podcast on GASB 53

To learn more about GASB 53 and the requirements for reporting, MuniMarket Pulse has produced an audio podcast interview with Jim Towne, Senior Vice President of DerivActiv on the subject. Listen to the podcast here.

The governmental entity must identify the risks that it is facing and highlight those risks.  Some of the common risks associated with derivatives are termination risk, credit risk, interest rate risk, basis risk, rollover risk, market access risk and foreign currency risk.  These risks will be highlighted and defined in the disclosures and specifically addressed for each derivative or type of derivative contract covered.

Call 1-866-200-9012 to speak to a GASB 53 Expert.

Additional GASB 53 Reporting Requirements

Risks that must be disclosed in the financial statements under GASB 53 are:

• Termination Risk
• Credit Risk
• Interest Rate Risk
• Basis Risk
• Rollover Risk
• Market Access Risk
• Foreign Currency Risk

Learn more about GASB 53 by downloading our GASB 53 white paper.