Separation in the Municipal Debt Market Following GASB 34 Implementation

46 Pages Posted: 5 Sep 2020

See all articles by William R. Baber

William R. Baber

Georgetown University - Department of Accounting and Business Law

Amanda Beck

Georgia State University

Allison Koester

Georgetown University

Date Written: July 30, 2020

Abstract

Governmental Accounting Standards Board Statement No. 34 (GASB 34), issued in 1999 with required implementation beginning in 2002, comprehensively and substantially changed the financial reporting model for state and local governments. Evidence reported in this study supports the notion that GASB 34 implementation created meaningful separation in the municipal debt market. High financial governments delayed, and low financial quality governments accelerated, new debt issuances in anticipation of GASB 34 implementation. Following GASB 34, high financial quality governments issued less insured debt and used greater debt relative to alternative financing sources (when compared with low financial quality governments). These results both support the efficacy of GASB 34 implementation and inform ongoing GASB deliberations regarding the financial reporting model for state and local governments.

Keywords: governmental accounting standards, municipal debt market, GASB 34

JEL Classification: G18, H74, M48

Suggested Citation

Baber, William R. and Beck, Amanda and Koester, Allison, Separation in the Municipal Debt Market Following GASB 34 Implementation (July 30, 2020). Available at SSRN: https://ssrn.com/abstract=3663553 or http://dx.doi.org/10.2139/ssrn.3663553

William R. Baber

Georgetown University - Department of Accounting and Business Law ( email )

McDonough School of Business
Washington, DC 20057
United States

Amanda Beck

Georgia State University ( email )

P.O. Box 4050
Atlanta, GA 30302-4050
United States

Allison Koester (Contact Author)

Georgetown University ( email )

McDonough School of Business
Washington, DC 20057
United States
202.687.6461 (Phone)

HOME PAGE: http://explore.georgetown.edu/people/apk29/

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