August 21, 2018
Published: Journal of Accountancy
The Accounting and Auditing Policy Committee of the Federal Accounting Standards Advisory Board (FASAB) is proposing to withdraw one of its technical releases on accounting for inter-entity costs for federal government reporting entities.
Technical Release 8, Clarification of Standards Relating to Inter-Entity Costs, is no longer consistent with Statement of Federal Financial Accounting Standards (SFFAS) 4, Managerial Cost Accounting Standards and Concepts, as amended by SFFAS 55, Amending Inter-entity Cost Provisions.
SFFAS 55 significantly revised the requirement to recognize inter-entity costs, amending SFFAS 4 to provide for the continued recognition of significant inter-entity costs by business-type activities. Recognition of inter-entity costs by activities that are not business-type activities no longer is required with the exception of inter-entity costs for personnel benefits and the Treasury Judgment Fund settlements, unless otherwise directed by the Office of Management and Budget.
Non-business-type activities may be accounted for under an election to recognize imputed cost and corresponding imputed financing for other types of inter-entity costs.
The proposal issued Tuesday would rescind Technical Release 8 because it no longer is consistent with SFFAS 4, as amended.
“It is important to ensure our technical guidance is current, relevant, and updated to reflect new pronouncements because users rely on it to complement higher-level generally accepted accounting principles,” FASAB Executive Director Wendy Payne said in a news release.
Comments are requested by Oct. 5 and can be emailed to firstname.lastname@example.org.