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<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Good afternoon ACFR Contacts,</span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">As we all know, the wildfires and ice storm in FY 2021 were major events, but what may be less known are the potential accounting implications. With this email I’d like to address
three that may be true for your agencies related to those events: FEMA, capital asset impairments, and/or insurance recoveries.
</span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="xmsonormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif">FEMA</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> – If your agency has amounts from FEMA that have or will cover a portion of those costs, it’s
important to highlight that FEMA is not an insurance carrier as it does not involve the transfer of risk to FEMA which occurs in an insurance arrangement. Therefore, no costs covered by FEMA are to be accounted for an insurance recovery. Recognize a FEMA receivable
when all the eligibility requirements have been met, and, importantly, the agreement/grant award with FEMA would need to have been executed prior to July 1, 2021. </span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="xmsonormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Capital Asset Impairments</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> - Further, as the wildfires and ice storm were prominent events in the
state, I recommend agencies consider whether a they have any capital asset impairments.
<a href="https://www.oregon.gov/das/Financial/Acctng/Documents/15.60.25.pdf">OAM 15.60.25</a>
<i>Accounting and Financial Reporting: Capital Assets: Capital Asset Impairments</i> contains the relevant guidance. There’s a flowchart on page 7 of that OAM that I think would be most helpful in making the determination. If there is an impairment,
<u>General Disclosure A</u> may be needed depending upon the specific facts and circumstances.</span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="xmsonormal"><b><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Insurance Recoveries</span></b><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> - Both
<span style="color:#1F497D"><a href="https://www.oregon.gov/das/Financial/Acctng/Documents/15.35.00.pdf">OAM 15.35.00</a>
</span><i>Accounting and Financial Reporting: Revenue and Receivables </i>and OAM 15.60.25 contain the same guidance about when to recognize an insurance recovery: (1) when
<i>realized</i> (received) by recording the cash receipt or (2) when <i>realizable</i> (a claim is pending for which the insurer has admitted or acknowledged coverage) by accruing a receivable.
<u>General Disclosure B</u> is used to report insurance recoveries.<o:p></o:p></span></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Below I’ve added two screenshots of references from the GASB Codification that touch on these three items:
</span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"><img border="0" width="2220" height="628" id="x__x005f_x0000_i1025" src="cid:image001.png@01D78307.D6D5BB20"></span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"><img border="0" width="2258" height="671" id="x__x005f_x0000_i1026" src="cid:image002.png@01D78307.D6D5BB20"></span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">I hope you find this helpful. If there are any questions, please reach out to your SARS analyst.</span><o:p></o:p></p>
<p class="xmsonormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"> </span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Rob</span><span style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:8.0pt;font-family:"Verdana",sans-serif;color:#353535">Robert W. Hamilton, CPA<o:p></o:p></span></b></p>
<p class="MsoNormal"><b><span style="font-size:8.0pt;font-family:"Verdana",sans-serif;color:#353535">Statewide Accounting and Reporting Services Manager</span></b><b><span style="font-family:"Verdana",sans-serif;color:#353535"><o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Verdana",sans-serif">Chief Financial Office</span><o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Verdana",sans-serif">Department of Administrative Services</span><span style="font-size:8.0pt"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Verdana",sans-serif">Cell: (971) 719-3031<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Verdana",sans-serif"><a href="http://www.oregon.gov/DAS/financial/acctng"><span style="color:blue">http://www.oregon.gov/DAS/financial/acctng</span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:8.0pt"> <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:8.0pt;font-family:"Verdana",sans-serif;color:#353535">Data Classification: Level 1 - Published</span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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