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GASB Statement No. 91, Conduit Debt Obligations <br />The primary objectives of this statement are to provide a single method of reporting conduit debt <br />obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by <br />issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This <br />statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; <br />establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for <br />accounting and financial reporting of additional commitments and voluntary commitments extended by <br />issuers and arrangements associated with conduit debt obligations; and improving required note <br />disclosures. <br />A conduit debt obligation is defined as a debt instrument having all of the following characteristics: <br />• There are at least three parties involved: (1) an issuer, (2) a third party obligor, and (3) a debt <br />holder or a debt trustee. <br />• The issuer and the third party obligor are not within the same financial reporting entity. <br />• The debt obligation is not a parity bond of the issuer, nor is it cross -collateralized with other debt <br />of the issuer. <br />• The third party obligor or its agent, not the issuer, ultimately receives the proceeds from the debt <br />issuance. <br />• The third party obligor, not the issuer, is primarily obligated for the payment of all amounts <br />associated with the debt obligation (debt service payments). <br />This statement also addresses arrangements, often characterized as leases, that are associated with conduit <br />debt obligations. In those arrangements, capital assets are constructed or acquired with the proceeds of a <br />conduit debt obligation and used by third party obligors in the course of their activities. <br />This statement requires issuers to disclose general information about their conduit debt obligations, <br />organized by type of commitment, including the aggregate outstanding principal amount of the issuers' <br />conduit debt obligations and a description of each type of commitment. Issuers that recognize liabilities <br />related to supporting the debt service of conduit debt obligations also should disclose information about <br />the amount recognized and how the liabilities changed during the reporting period. <br />The requirements of this statement are effective for reporting periods beginning after December 15, 2021. <br />Earlier application is encouraged. <br />-22- <br />