The New Tax Abatement Disclosure Requirements

Tax credits and incentives are widely used by state and local governments to encourage economic development, but no universal standard for the disclosure of such arrangements on financial statements has existed – until now. The Governmental Accounting Standards Board, the organization that establishes accounting and financial standards for U.S. state and local governments that follow U.S. generally accepted accounting principles, recently released Statement No. 77. The new standard could have far-reaching implications for state and local governments.