GASB Update #79 – Criteria for Measuring External Investment Pool Holding

State and local governments participate in external investment pools that function in a similar manner to money market investment funds. To enable governments and such pools to continue measuring investments at amortized cost amid regulatory change, the Governmental Accounting Standards Board (GASB) issued Statement No. 79 – Certain External Investment Pools and Pool Participants – in December 2015.

Governments and external investment pools followed guidance similar to Security and Exchange Commission (SEC) provisions contained in Rule 2a7. The GASB determined, however, that SEC rule changes effective April 2016 could pose compliance difficulties for governments and external investment pools. Statement No. 79 establishes standards for applying amortized cost measurements similar to the Rule 2a7 provisions that were in effect prior to April 2016.

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