Government Insights - GASB Statement No. 77

To help financial statement users more fully recognize the impact of tax abatements, the Governmental Accounting Standards Board (GASB) issued Statement No. 77 – Tax Abatement Disclosures – in August 2015.

State and local governments frequently enter into tax abatement agreements with individuals, businesses or other entities in which the government reduces – or abates – taxes owed in exchange for benefits the taxpayer can provide. Tax abatement agreements are frequently negotiated as economic development efforts in which a company receives various forms of tax abatement in exchange for building or expanding facilities, creating new jobs or delivering other economic benefits.

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