The Governmental Accounting Standards Board (GASB) will hold a public hearing on Accounting and Financial Reporting for Derivatives. A Preliminary View (PV) of the board’s position was released on April 28, 2006. The hearing will be held on June 21 beginning, at 9:00 a.m. at the San Diego Marriott Hotel and Marina, San Diego, Calif. The hearing is being held in conjunction with the annual professional development conference of the Association of Government Accountants.

The PV proposes that the fair value of derivatives be reported in the financial statements, as well as the change in that fair value. If however, a derivative is effectively hedging (reducing) the risk it was created to address, then the annual changes in the derivative’s fair value would be deferred and reported in a government’s balance sheet. Governments also would disclose additional information about their derivatives in the notes to the financial statements.

Written comments from individuals or organizations not participating in the public hearing should be submitted to the GASB by July 28, 2006.