Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2006 BASIC FINANCIAL STATEMENTS - Notes To Financial Statements - Note 25 New Accounting Pronouncements

State of Connecticut

Notes to the Financial Statements

June 30, 2006

Note 25 New Accounting Pronouncements

In fiscal year 2006, the State implemented the following Statements issued by the Governmental Accounting Standards Board: Statement No. 44, "Economic Condition Reporting: The Statistical Section"; and Statement No. 46, "Net Assets Restricted by Enabling Legislation."

Statement No. 44 provides new guidance regarding the information included in the Statistical Section of the Comprehensive Annual Financial Report. According to the Statement, the Statistical Section should contain information about five distinct categories: financial trends, revenue capacity, debt capacity, demographic and economic, and operating indicators.

Statement No. 46 clarifies the meaning of net assets that are restricted by enabling legislation and requires that the amount of net assets restricted by enabling legislation be disclosed in the notes to the financial statements.

As of June 30, 2006, the government-wide statement of net assets reports $3,201 million of restricted net assets, of which $192 million is restricted by enabling legislation.