Hoping for more efficient and effective use of financial reports, the Governmental Accounting Standards Board (GASB) has issued Concepts Statement No. 3, Communication Methods in General Purpose External Financial Reports That Contain Basic Financial Statements, Business Wire reported.
Since 1984, GASB has established and improved financial accounting and reporting standards for state and local governments.
The Concept Statement seeks to provide a conceptual basis for determining communication methods for presenting information from general-purpose external financial reports that include basic financial statements.
Some of the communication methods include recognition in basic financial statements, disclosure in notes to basic financial statements, presentation as required supplementary information (RSI), and presentation as supplementary information, Business Wire reported.
The Concepts Statement sets forth the communication methods commonly used in general purpose external financial reports, develops criteria for each communication method and provides a hierarchy for their use.
By clarifying the definitions, criteria and hierarchy GASB, as well as those who prepare financial reports, to determine the best way to communicate various informational items.
GASB expects that more consistency in communication should serve to make the reports more useful to users.
The Concepts Statement (Product Code GC03) can be ordered through the GASB's order department at 800.748.0659 or via its website.