Note X – Government Combinations

Note X – Government Combinations

Government Combinations: Mergers, Transfers of Operations, Acquisitions, Disposals of Operations

A template for this note is not available. See “Instructions to preparer:” for various disclosures that may be required.

Instructions to preparer:

Adjust the title appropriately to the government’s combination. The following disclosure applies to any combination:

  • Brief description of combination,

  • Date of combination, and

  • Brief description of the primary reason for the combination.

Government Mergers and Transfers of Operations

The new/continuing government should disclose:

1. Amounts recognized for each financial element in the statement of net position of the merged entity:

  • Within total assets, distinguishing: current assets, capital assets, and other assets

  • Within total liabilities, distinguishing: current amount from long-term amounts

  • Deferred outflows and inflows

2. Brief description of significant adjustment, and

3. Initial amounts recognized by the new/continuing government if different from those previously recognized by the merged entity (because of adjustments).

Government Acquisitions

For government acquisition, the acquiring government should disclose:

  • Brief description of the consideration provided,

  • Total amount of net position acquired, and

  • Brief description of contingent consideration arrangements.

Disposals of Operations

  • A government disposing of operations should disclose:

  • Identification of operations that were transferred or sold,

  • Description of the facts and circumstances leading to the disposal,

  • Total expenses (distinguishing between operating and nonoperating),

  • Total revenues (distinguishing between operating and nonoperating), and

  • Total governmental fund revenues and expenditures.

For a detailed discussion of the governmental combinations see GASB Statement 69, Government Combinations and Disposals of Government Operations.