On August 15, 2015, the Government Accounting Standards Board (GASB) issued Statement No. 77 (the “Tax Abatement Standard”) concerning financial reporting of tax abatements and other economic development incentives that reduce tax revenues. The new Tax Abatement Standard applies to financial reports of all state and local governmental entities. The requirements are effective for financial statements for reporting periods beginning after December 15, 2015, though the GASB encourages earlier compliance.

Purpose -

Noting that state and local governments employ a variety of programs and policies that reduce taxes with the intent of encouraging economic development, job creation or other governmental goals, the GASB adopted its Tax Abatement Standard for the general purpose of providing citizens, taxpayers, legislative and oversight bodies, municipal bond analysts and others with information regarding tax abatement agreements in order to permit them to better evaluate the financial health of governments, make decisions and assess accountability.