GASB proposes to amend financial reporting entity requirements
by AccountingWEB on
The Governmental Accounting Standards Board has issued an Exposure Draft of a proposed statement, The Financial Reporting Entity, an amendment of GASB Statements No. 14 and No. 34.
The proposed statement is intended to improve guidance for including, presenting, and disclosing information about component units and equity interest transactions of a financial reporting entity, according to the standards board.
The proposed statement also is designed to improve financial reporting of component units, which are legally separate organizations that state and local governments include in their financial reports. It would modify the existing criteria for inclusion of organizations that are fiscally dependent on a government by adding a requirement that the potential component unit and the primary government also have a financial benefit or burden relationship.
In cases where the government determines it would be misleading to exclude an organization that does not meet the financial accountability concept from its financial reports, the proposed statement would clarify the manner in which that determination should be made.
“Our re-examination of Statement 14 showed that it is generally effective, but that there is a need for greater clarity on certain issues,” Robert H. Attmore, GASB chairman, said in a news release on Friday. “This proposed statement would enhance the public’s ability to assess accountability by ensuring that a government’s financial report includes all of the appropriate organizations, and by enhancing consistency and comparability across governments.”
The proposed statement also would amend the criteria for blending – the reporting of component units as if they were part of the primary government. Finally, it would clarify the reporting of equity interests in legally separate organizations. Provisions of the proposed statement would be effective for financial statements for periods beginning after June 15, 2012, with earlier application encouraged.
GASB constituents are asked to review the draft and provide written comment by June 30, 2010. The draft may be downloaded from the GASB’s Web site at www.gasb.org/exp. The GASB plans to have a public hearing at its regular meeting at 1 p.m. on August 3, at its offices in Norwalk, Connecticut. Interested parties may attend in person or participate by telephone. Details on how to participate are available at www.gasb.org/exp.
About the GASB:
The GASB is an independent, not-for-profit organization formed in 1984 that establishes and improves financial accounting and reporting standards for state and local governments. Its seven members are drawn from the Board’s diverse constituency, including preparers and auditors of government financial statements, users of those statements, and members of the academic community. More information about the GASB can be found at its Web site www.gasb.org.
Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked
2 weeks 3 days ago by mucar1990