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GASB Statement No. 54

In February 2009, Governmental Accounting Standards Board (GASB) issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions, which is effective for periods that begin after June 15, 2010. The objective of GASB 54 is to enhance the usefulness of fund balance information by 1) clarifying existing governmental fund type definitions, and 2) providing clearer fund balance classifications that can be more consistently applied. Implementation of GASB 54 is required for the first fiscal year ending June 30, 2011.

Fund type definitions

OFM has reviewed each governmental fund type account to ensure it met the new definitions.  This statement particularly impacts Special Revenue funds as each account is required to have substantial restricted or committed revenue.  “Revenue” does not include transfers or other financing sources. These changes are reflected in Section 75.30 of the State Administrative & Accounting Manual (SAAM).


GASB 54 establishes fund balance classifications that comprise a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported in governmental funds.

General ledger codes

GASB 54 requires fund balance to be reported by purpose or function of restriction. Fund balance general ledger (GL) codes were assigned for each account based on the purpose of the account. To implement the widespread fund balance classification changes under GASB 54, it was not possible to keep the previous governmental fund balance GL codes.

In order to facilitate reporting fund balance by the new GASB requirement for purpose or function, fund balance will close to each new GL code, as appropriate.  It will be important to note which GL code has been assigned as the closing GL code for each account. When you make “reservations” of fund balance, you will be adjusting the closing GL code. For a list of governmental accounts with closing fund balance GL codes, refer to SAAM Subsection 75.30.50.

For more information or questions regarding the implementation of GASB 54, please contact your OFM accounting consultant.