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GASB 62: Codification of Pre-1989 FASB and AICPA Guidance for Governments

Sherman Hsieh

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Last updated: October 12, 2026 · Independent guide · We do not sell rankings or coverage.

GASB 62 is the Governmental Accounting Standards Board statement, issued in December 2010, that moved the parts of pre-November 30, 1989 FASB Statements and Interpretations, APB Opinions and AICPA Accounting Research Bulletins that apply to governments into GASB’s own literature. It covers interest capitalization, exchange revenue recognition, inventory, contingencies, leases, regulated operations and more. Later statements have superseded several sections, notably interest capitalization (GASB 89), leases (GASB 87) and accounting changes (GASB 100). This guide maps what remains in force and what to set up in your systems.

Why GASB 62 exists

Before GASB 62, governments had to look outside GASB literature for much of their guidance. GASB Statement 20 (GASB, September 1993) told proprietary activities to apply FASB and AICPA pronouncements issued on or before November 30, 1989 unless they conflicted with GASB standards, and let them elect later FASB standards too.

GASB 62 ended that arrangement. Its summary says it incorporates into GASB literature the guidance in FASB Statements and Interpretations, APB Opinions and AICPA Accounting Research Bulletins issued on or before November 30, 1989 that does not conflict with GASB pronouncements (GASB Statement 62, p. ii, December 2010). The Board’s stated aim was that state and local governments derive their guidance from a single source. It also notes that those FASB and AICPA documents became nonauthoritative for the private sector on July 1, 2009.

GASB Chairman Robert H. Attmore said the guidance had “largely been taken ‘as is’” (Accounting Today, December 30, 2010). North Carolina’s Office of the State Controller said the impact on most state and local governments should be minimal (NC OSC, March 15, 2013).

What GASB 62 incorporated, and what is still in force

The table lists each topic with its paragraph range and the later statements that superseded or amended it.

Sources: paragraph ranges from the GASB 62 table of contents; status from the “supersedes” and “amends” paragraphs of GASB Statements 66, 87, 89, 94, 100, 103, 104 and 105, all listed in Sources below. This is not a full amendment history; use the current Codification for that.

What the rule requires in detail

Capitalization of interest (historical, now superseded)

As issued, paragraphs 5–22 required business-type activities and enterprise funds to capitalize interest on qualifying assets. Qualifying assets included assets built for the government’s own use and discrete projects for sale or lease (paragraph 8), and the amount was the “avoidable” interest (paragraph 11).

GASB 89, issued in June 2018, superseded paragraphs 5–22. It requires interest cost incurred before the end of a construction period to be “recognized as an expense in the period in which the cost is incurred” for financial statements using the economic resources measurement focus, and as an expenditure in governmental funds on a basis consistent with governmental fund principles (GASB Statement 89, paragraphs 4–5, June 2018). GASB 95 postponed its effective date to reporting periods beginning after December 15, 2020 (GASB Statement 95, paragraph 4e, May 2020). Application is prospective, so interest capitalized earlier stays in the asset’s cost.

One exception survives. A business-type activity applying regulated operations accounting still capitalizes interest that its rate regulator includes in allowable cost, as a regulatory asset under the amended paragraph 485 and Codification Sec. Re10.110 (GASB 89, paragraph B20 and Appendix C).

Illustration: an enterprise fund borrows $10,000,000 at 4% to build a treatment plant over 18 months. Interest of about $400,000 a year during construction was capitalized into the plant under GASB 62. Under GASB 89, the fund expenses it each year, unless the utility follows regulated operations accounting and its rate regulator includes the interest in allowable cost.

Revenue recognition for exchange transactions

Paragraph 23 says revenue from exchange transactions generally should be recognized when an exchange in the ordinary course of operations is effected, unless collection of the price is not reasonably assured. It states that, absent special circumstances, “the installment method is not acceptable” (GASB 62, paragraph 23). Paragraphs 24–28 on sales with a right of return apply only to business-type activities and proprietary funds, which matters for campus bookstores and other resale operations.

These paragraphs remain the main exchange-revenue guidance for governments. GASB’s tentative decisions on its revenue and expense recognition project, last updated May 20, 2026, place paragraphs 23–28 within the project’s scope (GASB, May 20, 2026). Audit firm Forvis Mazars, which sells audit and advisory services to governments, reports that the first exposure draft is expected by September 2027 and a final statement in February 2031 (Forvis Mazars, September 8, 2026).

Inventory

Under paragraph 3(f), the inventory paragraphs (188–201) apply only to business-type activities and proprietary funds. Governmental fund inventories follow other GASB guidance. For example, North Carolina’s statewide policy cites Codification Sec. 1600.140, uses the consumption method, values resale merchandise at the lower of cost or market using the retail method, and values supplies using first-in, first-out, last invoice cost or average cost (NC OSC, January 17, 2025). GASB 104 amended paragraph 190 in September 2024 (GASB Statement 104).

Regulated operations

Paragraphs 476–500 can apply to business-type activities, such as public utilities, that meet the criteria in paragraph 476. These allow regulatory assets for costs recovered through future rates and regulatory liabilities for amounts returned to customers. Central Contra Costa Sanitary District’s board policy summarizes the criteria as rates approved by an independent regulator or by a governing board authorized to set binding rates, rates designed to recover the cost of service, and a reasonable expectation that customers will pay those rates (Central San BP 046, revised October 17, 2024). Chelan County PUD used the same provisions to defer investment fair value changes so they did not affect its operating statement (Chelan PUD Resolution 13-13829, December 2, 2013).

GASB 65 later reclassified some regulated deferrals, such as rate increases collected for future costs, from liabilities to deferred inflows of resources (California State Controller’s Office GASB 65 summary, no date shown).

Extraordinary items and the other in-force topics

GASB 62 defines the terms “unusual in nature” and “infrequency of occurrence.” GASB 103, effective for fiscal years beginning after June 15, 2025, replaced separate extraordinary and special items with one category of “unusual or infrequent items” but kept the Statement 62 definitions (GASB Statement 103, paragraphs 9 and B37, April 2024).

Who it applies to and who is exempt

GASB 62 applies to state and local governments, but paragraph 3 limits several topics. Right-of-return revenue and inventory apply only to business-type activities and proprietary funds. Special and extraordinary items, related parties, contingencies and (originally) leases also apply to governmental funds. Regulated operations apply only to business-type activities that meet the paragraph 476 criteria. Public colleges reporting as business-type activities feel it most. Private colleges follow FASB standards and are outside GASB 62.

Effective dates and consequences

GASB 62 took effect for periods beginning after December 15, 2011. Governments with June 30 year-ends applied it in fiscal 2013 at the latest. The University of California adopted it early, in the year ended June 30, 2011, and concluded that its accounting policies did not change; only its basis-of-presentation wording did (UC Issues Resolution Memo 62-1, May 4, 2011).

GASB imposes no fines. Your external auditor assesses compliance in the financial statement audit; Central San’s policy says its independent auditors assess conformance with GASB 62 in their audit of its annual comprehensive financial report. Outdated practices, such as still capitalizing construction interest after GASB 89, become audit issues.

Records you should keep

• An accounting policy that cites current GASB statements and Codification sections, not the original FASB documents.
• For capital assets built before your GASB 89 adoption date, the schedule of interest capitalized, since that amount stays in historical cost and depreciation.
• For regulated operations: the board or regulator actions that approve each deferral, the rate impact analysis, and the amortization period.
• Inventory costing method documentation and lower-of-cost-or-market reviews for resale inventories.
• Contingency assessments and related-party listings supporting note disclosures.

What to set up in your systems

GASB 62 is handled through general ledger and fixed asset configuration rather than a dedicated tool. Check these settings:

• Construction interest: confirm no capitalization or project costing rule still moves interest into construction in progress for enterprise funds. See our guide to construction accounting for public works projects for the project costing side.
• Regulatory accounts: separate regulatory asset, regulatory liability and deferred inflow accounts by item, with amortization that matches the rate order.
• Inventory costing: a costing method per location and a periodic valuation adjustment for resale inventory.
• Unusual or infrequent items: account or attribute codes that isolate these items for GASB 103 presentation.
• Policy references: update close checklists and note templates that still cite “FASB pronouncements issued before November 30, 1989.”

If your system cannot hold these attributes or produce fund and government-wide views from one ledger, see our guide to ERP software for financial control and compliance.

How we researched this

We read the GASB 62 standard and the “supersedes” and “amends” paragraphs of every later GASB statement that changed it, using PDFs published on storage.gasb.org. We then reviewed how a state controller’s office, a university system and two utilities applied it in practice. The top-ranking pages for “gasb 62” include state guidance pages, university memos and lease software blogs that treat it only as the old lease standard. We checked all sources on October 12, 2026. We do not receive payment from any firm or vendor named here.

Related guides

• GAAP vs GASB: Governments, Public Colleges and Nonprofits
• GASB 34 Reporting: Requirements and 2026 Changes
• GASB 100: Accounting Changes and Error Corrections

Frequently asked questions

Is GASB 62 still effective?

Yes. GASB 62 remains authoritative for the topics that have not been superseded, including exchange revenue recognition, inventory, contingencies, construction-type contracts and regulated operations. Its lease, interest capitalization, prior-period adjustment and accounting change paragraphs have been superseded by GASB 87, 89 and 100.

Did GASB 87 replace GASB 62?

GASB 87 replaced only the lease section of GASB 62, paragraphs 211–271, and amended several other paragraphs. GASB 87 was issued in June 2017, and GASB 95 postponed its effective date to fiscal years beginning after June 15, 2021.

Can a government still capitalize interest on construction?

Not under general GASB rules. Since GASB 89, construction-period interest is expensed in enterprise funds and business-type activities and reported as an expenditure in governmental funds. Utilities applying regulated operations accounting are the exception.

Can enterprise funds still use current FASB standards?

Not as authoritative guidance. GASB 62 superseded Statement 20, which had allowed enterprise funds to elect post-1989 FASB standards. Later FASB guidance can still be consulted as nonauthoritative literature when GASB standards do not address a transaction, but only if it does not conflict with GASB requirements.

Where is GASB 62 in the GASB Codification?

Its content is spread across topical sections of the Codification of Governmental Accounting and Financial Reporting Standards, such as Sec. I30 (imputation of interest), Sec. R30 (real estate) and Sec. Re10 (regulated operations). Cite the current Codification for current wording.

Sources

• GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989 FASB and AICPA Pronouncements, December 2010
• GASB Statement No. 20, September 1993
• GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period, June 2018
• GASB Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance, May 2020
• GASB Statement No. 87, Leases, June 2017
• GASB Statement No. 94, March 2020
• GASB Statement No. 100, Accounting Changes and Error Corrections, June 2022
• GASB Statement No. 103, Financial Reporting Model Improvements, April 2024
• GASB Statement No. 104, Disclosure of Certain Capital Assets, September 2024
• GASB Statement No. 105, Subsequent Events, December 2025
• GASB, Revenue and Expense Recognition: Tentative Board Decisions, May 20, 2026
• University of California, Issues Resolution Memo on GASB 66, March 2012
• University of California, Issues Resolution Memo 62-1, May 4, 2011
• North Carolina Office of the State Controller, GASB 62 focus area, March 15, 2013
• North Carolina Office of the State Controller, Statewide Accounting Policy: Inventories, January 17, 2025
• California State Controller’s Office, GASB 65 summary, no date shown
• Central Contra Costa Sanitary District, Board Policy 046: Regulatory Accounting, revised October 17, 2024
• Chelan County PUD, Resolution 13-13829, December 2, 2013
• Accounting Today, GASB Unites Government Guidance from FASB, AICPA, December 30, 2010
• Forvis Mazars, GASB 2026–2027 Outlook, September 8, 2026 (audit firm)

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Sherman Hsieh

CEO & Editor-in-Chief, Business-Software.com
Independent analysis of enterprise software — ERP, CRM and more

Sherman Hsieh is the founder, CEO, and editor-in-chief of Business-Software.com. He leads the site's independent, buyer-focused coverage of ERP, CRM, and other business systems, including vendor-neutral comparisons, pricing analysis, and implementation guidance. Before founding Business-Software.com, Sherman was an executive at Siebel ...