July 24, 2020
The Governmental Accounting Standards Board (GASB) today issued for public feedback a proposed Statement that is designed to improve to key components of the blueprint for state and local government annual financial reports.
The Exposure Draft, Financial Reporting Model Improvements, proposes improvements that are designed to:
· Enhance the effectiveness of financial reports in providing information essential for making decisions and assessing a government’s accountability, and
· Address certain application issues.
The Exposure Draft includes proposals that would establish or modify existing accounting and financial reporting requirements related to:
· Application of the short-term financial resources measurement focus and accrual basis of accounting in governmental funds (replacing the existing current financial resources measurement focus and modified accrual basis of accounting)
· Management’s discussion and analysis
· Presentation of governmental fund financial statements
· Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position
· Unusual or infrequent items
· Budgetary comparison information.
The changes in the proposed Statement would improve financial reporting in a variety of ways. For example, the proposed short-term financial resources measurement focus and accrual basis of accounting would improve the consistency of the information in governmental fund financial statements. The proposed changes to the presentation of governmental fund financial statements would (1) make the short-term nature of their information more evident and understandable and (2) more clearly differentiate them from the long-term perspective of the government-wide financial statements.
Stakeholders are asked to review the proposals and provide input on the document by February 26, 2021. A series of public hearings and user forums on the Exposure Draft tentatively have been scheduled for March and April 2021 to further enable stakeholders to share their views with the Board. More information about commenting on the Exposure Draft and participating in the public hearings and users forums can be found in the document.