GASB Issues ED on Disclosures About Investment Risks
On July 1, 2002, the Governmental Accounting Standards Board (GASB) released an exposure draft (ED) designed to provide the public with better information about the risks that could potentially impact a government's ability to provide services and pay its debts.
Entitled "Exposure Draft, Deposit and Investment Risk Disclosures," the ED resulted from the first project in GASB's comprehensive review of its existing accounting standards after recent Federal banking reforms.
GASB Project Manager Randal J. Finden explained, "All investments carry some form of risk, and those risks must be communicated to the public in financial statements."
The relevant types of disclosures may include:
- Financial statement disclosures that cover deposit and investment risks,
- Credit risk disclosures that include credit quality information issued by rating agencies, and
- Interest rate disclosures that include investment maturity information, (e.g., weighted average maturities).
GASB's press release explains that the ED amends the custodial credit risk disclosures of GASB Statement No. 3, "Deposits with Financial Institutions, Investments (including Repurchase Agreements), and Reverse Repurchase Agreements."
According to GASB's Web site, the full text of the proposed standard will be available to download approximately one month after the official release date. The effective date of the standard would be for fiscal years beginning after June 15, 2004. Comments are requested by September 27, 2002.
Voice of the Editor
Which isn’t completely true. I mean, occasionally I drop by when I manage to sneak out of the nonstop frat party over at Going Concern, but I’m mostly a wallflower over there. I’m happy to say that I’ve been given express permission (or explicit orders, if you like) to wander over here to AccountingWEB more often.
Why is that, you might ask? My job is to replace the irreplaceable Gail Perry as Editor-in-Chief. What does that mean? I don’t really know! I think it’ll be fun getting a feel for things, throwing in my own thoughts here and there, and listening to the discussions you’re having about the accounting profession.