United States

Revised reporting of conduit debt obligations


The Governmental Accounting Standards Board (GASB) recently issued Statement No. 91, Conduit Debt Obligations, to eliminate diversity in practice associated with government issuers’ financial reporting of conduit debt obligations. Statement No. 91 achieves that objective by:

  • Clarifying the definition of a conduit debt obligation.
  • Establishing that a conduit debt obligation is a liability of the third-party obligor – not a liability of the issuer; therefore an issuer should not recognize a conduit debt obligation as a liability, which was allowed under GASB Interpretation No. 2, Disclosure of Conduit Debt Obligations.
  • Establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements (often characterized in practice as leases) associated with conduit debt obligations.
  • Requiring issuers to disclose general information about their conduit debt obligations. Issuers that recognize liabilities related to supporting the debt service of conduit debt obligations also should disclose information about the amount recognized and how the liabilities change during the reporting period.

The new guidance is effective for reporting periods beginning after December 15, 2020. Earlier application is encouraged.