The Governmental Accounting Standards Board is continuing to seek comments on its Invitation to Comment (ITC) on Pension Accounting and Financial Reporting through July 31. The ITC is designed to elicit comment at an early stage of the reexamination of GASB’s pension accounting and financial reporting standards and your thoughts about it are valuable to us.
The ITC addresses key pension accounting and financial reporting issues raised during research regarding the application and effectiveness of the standards set forth in GASB Statements No. 25, Financial Reporting for Defined Benefit Pension Plans and Note Disclosures for Defined Contribution Plans, and No. 27, Accounting for Pensions by State and Local Governmental Employers, as amended. The process now underway is designed to provide the Board an opportunity to consider whether modifications to the pension standards are required.
The ITC is available through the GASB website at www.gasb.org/exp.
Monday, July 13, 2009
Wednesday, July 1, 2009
GASB Proposes Statements on Service Concession Arrangements and Financial Instruments
Norwalk, CT, June 30, 2009—The Governmental Accounting Standards Board (GASB) issued two Exposure Drafts (EDs) of proposed Statements, Accounting and Financial Reporting for Service Concession Arrangements, and Financial Instruments Omnibus. The proposed Statements are intended to increase transparency in these financial activities.
The proposed Statement on service concession arrangements (SCAs) would establish accounting and financial reporting requirements for these types of partnership arrangements between governments and private entities and between multiple governmental entities. An SCA is an arrangement between a government (the transferor) and an operator in which (a) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a “facility”) and (b) the operator collects fees from third parties. Recent examples of SCAs include long-term arrangements associated with toll roads. The proposal provides guidance on determining whether the transferor should report the facility subject to the SCA as its capital asset, and reporting guidance for addressing upfront or installment payments related to the SCA. It also provides reporting guidance for governments acting as operators in an SCA.
“As governments increasingly partner with private and other public entities to provide services to citizens, taxpayers and other financial statement users need clear, understandable, and comparable information about the costs, revenues, and obligations associated with these partnerships,” said Robert Attmore, chairman of the GASB.
The proposed Statement on financial instruments is intended to update and improve existing standards regarding financial reporting and disclosure requirements of some financial instruments for which significant issues have been identified in practice. The amendments would:
· Extend the use of fair value measurement to unallocated insurance contracts to improve the consistency of reporting by pension and OPEB plans
· Emphasize the applicability of SEC requirements to certain external investment pools—known as 2a7-like pools—to provide practitioners with improved guidance
· Limit interest rate risk disclosures for investments in mutual funds to bond mutual funds to eliminate disclosures that may not provide decision-useful information
· Address the applicability of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, to certain financial instruments to clarify which financial instruments are within the scope of that standard and provide greater consistency in financial reporting.
Mr. Attmore stated, “We encourage our constituents to review both EDs and provide feedback on whether or not they think they would indeed lead to improved reporting in these areas.”
The EDs, and instructions on submitting written comments, can be downloaded free of charge at www.gasb.org/exp. The deadline for submitting written comments on Accounting and Financial Reporting for Service Concession Arrangements is September 30, 2009, and a public hearing on the proposal is scheduled for October 6, 2009. Written comments on the Financial Instruments Omnibus ED are due by October 30, 2009.
The proposed Statement on service concession arrangements (SCAs) would establish accounting and financial reporting requirements for these types of partnership arrangements between governments and private entities and between multiple governmental entities. An SCA is an arrangement between a government (the transferor) and an operator in which (a) the transferor conveys to an operator the right and related obligation to provide services through the use of infrastructure or another public asset (a “facility”) and (b) the operator collects fees from third parties. Recent examples of SCAs include long-term arrangements associated with toll roads. The proposal provides guidance on determining whether the transferor should report the facility subject to the SCA as its capital asset, and reporting guidance for addressing upfront or installment payments related to the SCA. It also provides reporting guidance for governments acting as operators in an SCA.
“As governments increasingly partner with private and other public entities to provide services to citizens, taxpayers and other financial statement users need clear, understandable, and comparable information about the costs, revenues, and obligations associated with these partnerships,” said Robert Attmore, chairman of the GASB.
The proposed Statement on financial instruments is intended to update and improve existing standards regarding financial reporting and disclosure requirements of some financial instruments for which significant issues have been identified in practice. The amendments would:
· Extend the use of fair value measurement to unallocated insurance contracts to improve the consistency of reporting by pension and OPEB plans
· Emphasize the applicability of SEC requirements to certain external investment pools—known as 2a7-like pools—to provide practitioners with improved guidance
· Limit interest rate risk disclosures for investments in mutual funds to bond mutual funds to eliminate disclosures that may not provide decision-useful information
· Address the applicability of Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, to certain financial instruments to clarify which financial instruments are within the scope of that standard and provide greater consistency in financial reporting.
Mr. Attmore stated, “We encourage our constituents to review both EDs and provide feedback on whether or not they think they would indeed lead to improved reporting in these areas.”
The EDs, and instructions on submitting written comments, can be downloaded free of charge at www.gasb.org/exp. The deadline for submitting written comments on Accounting and Financial Reporting for Service Concession Arrangements is September 30, 2009, and a public hearing on the proposal is scheduled for October 6, 2009. Written comments on the Financial Instruments Omnibus ED are due by October 30, 2009.
GASB Proposes Suggested Guidelines for Voluntary Reporting of SEA Performance Information
Norwalk, CT, June 30, 2009—The Governmental Accounting Standards Board (GASB) issued Proposed Suggested Guidelines for Voluntary Reporting, SEA Performance Information. The purpose of this document is to obtain feedback from constituents on suggested guidelines intended to provide a common framework for the effective external communication of SEA performance information.
The reporting of SEA performance information provides more information about a government’s actual performance in providing services to its citizens than can be included in traditional financial statements, and is therefore an important method of demonstrating accountability and stewardship. The suggested guidelines are intended to help state and local governments that choose to communicate SEA performance information to citizens, elected officials, and other interested parties to do so more effectively.
While it is beyond the scope of the GASB to establish the goals and objectives of state and local government services, to develop specific nonfinancial measures or indicators of service performance, or to set benchmarks for service performance, research has shown that many constituents consider it appropriate at this time for the GASB to issue conceptually based suggested guidelines for voluntary reporting of SEA performance information.
Constituents are invited to provide feedback on the suggested guidelines, which include what the GASB has identified as the four essential components of an effective SEA report, the six qualitative characteristics of SEA performance information, and three keys to effective communication.
The four components identified are purpose and scope, major goals and objectives, key measures of SEA performance, and discussion and analysis of results and challenges. The six qualitative characteristics, as set forth in Concepts Statement No. 1, Objectives of Financial Reporting, are relevance, understandability, comparability, timeliness, consistency, and reliability. The three keys to effective communication are intended audiences, multiple levels of reporting, and forms of communication.
Constituents are encouraged to review the proposed suggested guidelines and provide feedback. Written comments are due by October 30, 2009. The document—including instructions on submitting comments—can be downloaded from the GASB’s website at www.gasb.org/exp. Individuals can also obtain one copy of the Proposal free of charge by contacting the GASB Order Department at 1-800-748-0659.
The reporting of SEA performance information provides more information about a government’s actual performance in providing services to its citizens than can be included in traditional financial statements, and is therefore an important method of demonstrating accountability and stewardship. The suggested guidelines are intended to help state and local governments that choose to communicate SEA performance information to citizens, elected officials, and other interested parties to do so more effectively.
While it is beyond the scope of the GASB to establish the goals and objectives of state and local government services, to develop specific nonfinancial measures or indicators of service performance, or to set benchmarks for service performance, research has shown that many constituents consider it appropriate at this time for the GASB to issue conceptually based suggested guidelines for voluntary reporting of SEA performance information.
Constituents are invited to provide feedback on the suggested guidelines, which include what the GASB has identified as the four essential components of an effective SEA report, the six qualitative characteristics of SEA performance information, and three keys to effective communication.
The four components identified are purpose and scope, major goals and objectives, key measures of SEA performance, and discussion and analysis of results and challenges. The six qualitative characteristics, as set forth in Concepts Statement No. 1, Objectives of Financial Reporting, are relevance, understandability, comparability, timeliness, consistency, and reliability. The three keys to effective communication are intended audiences, multiple levels of reporting, and forms of communication.
Constituents are encouraged to review the proposed suggested guidelines and provide feedback. Written comments are due by October 30, 2009. The document—including instructions on submitting comments—can be downloaded from the GASB’s website at www.gasb.org/exp. Individuals can also obtain one copy of the Proposal free of charge by contacting the GASB Order Department at 1-800-748-0659.
2009 GASAC Project Prioritization
The following are projects idenfitied as priorities by the GASAC
OPEB: Certain Implementation Issues
Codification of Pre-November 30, 1989 FASB Pronouncements
Fair Value Measurement
Government Combinations
Economic Condition Reporting: Fiscal Sustainability
Reexamination-Demand Bonds-Interpretation 1
Tax Abatement Disclosures
Electronic Financial Reporting
Reexamination-Securities Lending-Statement 28
Financial Transactions with Characteristics of Both Loans and Grants
Financial Performance Measurements
Reexamination-Compensated Absences-Statement 16
Reexamination-Conduit Debt-Interpretation 2
Exchange-like Revenues
Reexamination-Debt Refundings-Statements 7 and 23
Reexamination-Deferred Compensation Plans-Statement 32
In-Kind Contributions
Reexamination-Risk Financing-Statements 10 & 30 and Interpretation 4
Present Value
Reporting Unit Presentations
Irrevocable Charitable Trusts
Popular Reporting
Reexamination-Escheat Property-Statement 21
Preservation Method
Reexamination-Landfills-Statement 18
OPEB: Certain Implementation Issues
Codification of Pre-November 30, 1989 FASB Pronouncements
Fair Value Measurement
Government Combinations
Economic Condition Reporting: Fiscal Sustainability
Reexamination-Demand Bonds-Interpretation 1
Tax Abatement Disclosures
Electronic Financial Reporting
Reexamination-Securities Lending-Statement 28
Financial Transactions with Characteristics of Both Loans and Grants
Financial Performance Measurements
Reexamination-Compensated Absences-Statement 16
Reexamination-Conduit Debt-Interpretation 2
Exchange-like Revenues
Reexamination-Debt Refundings-Statements 7 and 23
Reexamination-Deferred Compensation Plans-Statement 32
In-Kind Contributions
Reexamination-Risk Financing-Statements 10 & 30 and Interpretation 4
Present Value
Reporting Unit Presentations
Irrevocable Charitable Trusts
Popular Reporting
Reexamination-Escheat Property-Statement 21
Preservation Method
Reexamination-Landfills-Statement 18
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