The US Governmental Accounting Standards Board (GASB) has issued a standard aimed at improving the way mergers and acquisitions are reported by national and local government in the US.
The standard covers mergers, acquisitions or transfers of operations involving public sector entities, and also disposal of government operations such as transfers or sales to other governments.
Statement No. 69, Government Combinations and Disposals of Government Operations is intended to fit the reporting requirements of the public sector.
"Historically, governments have accounted for their mergers and acquisitions by analogizing to guidance intended for the private-sector business environment, which proved problematic because those standards focus on stock arrangements and ownership interests not present in the governmental setting," said GASB chairman Robert Attmore.
A statement issued by GASB explained that government mergers include "combinations of legally separate governments or governmental operations without the exchange of significant consideration, such as a payment."
Conversely government acquisitions, the board noted, are transactions "in which a government acquires another government, or its operations, in exchange for significant consideration."
In that sense the standard provides guidance to identify whether a government combination is a merger, an acquisition or a transfer of operations.
The standard will be published in February and comes into force 15 December 2013, although GASB has encouraged an application ahead of this date.
Governmental Accounting Standards Board