Component Unit Disclosure: The accompanying financial statements of the Foundation have been prepared in accordance with accounting principles generally accepted in the United States of America as prescribed by the Financial Accounting Standards Board (FASB). As such, certain revenue recognition criteria and presentation features are different from GASB revenue recognition criteria and presentation features.
During the year ended June 30, 2022, the Foundation made distributions of approximately $796,643 on behalf of the University for both net assets and unrestricted purposes. Complete financial statements for the Foundation can be obtained from the Kentucky State University Foundation, Inc. at P.O. Box 4210, Frankfort, KY 40604.
Recent Accounting Pronouncements Implemented: During fiscal year 2022, the University adopted the following accounting pronouncements.
In June 2020, GASB issued Statement No. 87, Leases, which provided guidance regarding lease accounting. It establishes a single model for lease accounting based on the foundational principle that a lease is financing the right to use an underlying asset. It requires the University to recognize lease liabilities and the intangible right-to-use lease assets as lessee, and leases receivable and deferred inflows of resources as lessor. The provisions of the statement were effective for fiscal years beginning after December 15, 2019 (fiscal year 2021). Due to the COVID-19 pandemic, GASB issued Statement No. 95, Postponement of the Effective Dates of Certain Authoritative Guidance, extending the provisions of this statement by 18 months to fiscal year 2022. On July 1, 2021, the University adopted Governmental Accounting Standards Board (GASB) Statement No. 87 – Leases, which requires all leases that have a maximum possible term greater than 12 months to be recorded in the statement of net position. Previously, leases classified as operating leases were not recorded in the statement of net position. The University did not recognize any lessor contracts for the year ending June 30, 2022. Right-of-use assets and lease liabilities of $611,871 for lessee contracts, which were reported at present value using the University's incremental borrowing rate unless otherwise noted in the contract were recognized as of July 1, 2021. No prior period adjustment was necessary to implement this standard, and there was no effect on net position as of July 1, 2021.
In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period became effected. The effective date for this statement (as amended) is for periods beginning after December 15, 2020. This statement states interest incurred during the construction period to be expensed rather than capitalized as an asset. This standard is to be applied prospectively. The University has implemented this in 2022.
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