10th
Anniversary Issue
This issue of FASAB News marks
the 10th anniversary of the creation of the Federal Accounting
Standards Advisory Board (FASAB or the Board). In addition to our regular
articles updating you on the latest Board deliberations and actions, we are
featuring articles reflecting on FASAB’s formation, its products, and its
future. We begin with a brief history of how the Board began, provide
perspectives from the Board’s past and present Chairs, Elmer Staats and David
Mosso, highlight some of the significant events in FASAB’s history as described
by its longest-serving member, Donald Chapin, then conclude with some brief
views of FASAB from the current Board members. For those history buffs, we also
have provided a complete list of the former and current Board and staff
members.
As readers of this newsletter know, Congress
passed the Chief Financial Officer’s Act (CFO Act) in 1990. That law required
audited financial statements, in accordance with “applicable standards,” for
selected Federal reporting entities. It was a step toward the comprehensive
requirement for audited financial statements established in 1994 by the
Government Management Reform Act. Congress passed the CFO Act in part due to
concerns about highly publicized financial management problems at various
Federal agencies.
Of course, accountants, auditors, and those
congressional staff who were knowledgeable about financial management
understood that audited financial statements don’t preclude the possibility of
fraud and other financial management problems. Even so, it was reasonable to
hope that the discipline imposed by the process of preparing and auditing such
statements could help to reduce the frequency and size of such problems. Many
individuals and organizations, including the Association of Government
Accountants and the American Institute of Certified Public Accountants,
contributed to this “good government” initiative.
The CFO Act did not define the source or
nature of the “applicable standards.” As part of the work preceding passage of
the CFO Act, it was necessary for the relevant parties to agree on a mechanism
for defining those standards. This was a difficult challenge. The Budget and
Accounting Procedures Act of 1950 had provided for the General Accounting
Office (GAO) to set accounting standards for Federal agencies. GAO subsequently
published such standards as “TITLE 2” of its Policies and Procedures Manual for the Guidance of Federal Agencies. Several
agencies adopted those standards, but the Office of Management and Budget (OMB)
did not require agencies to do so.
Indeed, some OMB officials asserted that the
provision of the 1950 Act giving GAO this authority was unconstitutional (that
is, for a legislative agency to define accounting standards for an executive
agency). Furthermore, as always among accountants, there were different
opinions about what accounting principles were appropriate for Federal
agencies. Although “TITLE 2” defined and discussed fund accounting, did not
require depreciation of all capital assets or recognition of social insurance
liabilities, and differed in other ways from the traditional “business
accounting model,” some accountants asserted that it was too much like
commercial accounting to be relevant to the Government.
The constitutional gap was bridged in
October 1990, when Secretary of the Treasury Nicholas Brady, Director of OMB
Richard Darman, and Comptroller General Charles Bowsher jointly agreed to
create and sponsor the Federal Accounting Standards Advisory Board. The Board
would consider and recommend the appropriate accounting standards for the
Government. For the first time, the legislative and executive branches agreed
to work together in an agreed framework, with an open, public process, to
determine the accounting standards that Federal agencies should follow.
Where FASAB Has Been and
What It Has Done – Part 1
A Brief Interview with
Elmer Staats, Former Comptroller General
of the United States and
First Chair of the FASAB, and
David Mosso, Current Chair
of the FASAB
Question: What do you believe is FASAB’s most
significant contribution to improving Federal financial management?
Mr. Staats: FASAB’s major contribution has been
its ability to bring together all the divergent views in the executive branch with
respect to the issues that have been identified by the Congress, the General
Accounting Office, the Office of Management and Budget, the Department of the
Treasury, and any of the participating agencies. FASAB is the logical extension
of the work of the Joint Financial Management Improvement Program, which had
its origin in the Budget and Accounting Procedures Act of 1950. FASAB obviously
could not be given regulatory authority directly but had to rely on the Office
of Management and Budget and the Department of the Treasury for compliance.
However, an important point in this respect is the action of the American
Institute of Certified Public Accountants extending its Rule 203 to the
issuances of FASAB after approval by the Office of Management and Budget and
the Treasury. This development lends even greater importance to the work of the
FASAB.
Mr. Mosso: I believe FASAB’s major contribution
has been to supply the mechanics, if you will, to the legislative framework for
Federal financial management provided by the Congress: the Chief Financial
Officers Act of 1990, the Government Performance and Results Act of 1993, and
the Government Management Reform Act of 1994. By the time that I became Chair,
FASAB had produced a “core” set of accounting standards that addressed the
basic elements of a traditional business reporting model. It also had tackled
the area of cost accounting and had begun addressing some of the more “unique”
areas of Federal accounting, areas it categorized as “stewardship,” such as national
defense assets, infrastructure assets, and cultural and educational items.
These 8 core standards, the 10 that we have issued since then, and the work
that we are continuing provides a standardized accounting and reporting format
that enhances Federal management and accountability. The financial statements
resulting from these standards have to withstand audit scrutiny. As users,
decision-makers, and the American citizens at large become more familiar with
these audited financial statements, they should be able to better understand
how and where the Federal Government’s resources are being used, assess
Government performance, and ask questions that further stimulate the
accountability process.
Question: Do you believe the Board has changed
since its inception in 1990?
Mr. Staats: I do not believe that the Board has
changed its focus or emphasis since its inception in 1990. In the early years
of FASAB, considerable time and effort was devoted to making certain that all
the Board members were in agreement with the mandate that was given to FASAB
and agreed on the appropriate procedures and priorities and making the member
agencies an integral part of the process. There were differences among the
agencies as to priorities, but these never developed into major disagreements.
Our objective was action to arrive at a consensus rather than to leave issues
unresolved. The consensus was fundamental to the effectiveness of the Board.
Given the fact that it was made up of diverse interests and sometimes strongly
held points of view, we decided early on not to follow a voting procedure.
Mr. Mosso: I agree that the Board has not
changed its primary focus or emphasis – setting sound, comprehensive and
complete accounting standards remains its top priority. Keeping the Board
focused and moving projects through the due process procedure continues to be a
challenge, especially given the diverse opinions of our very experienced Board
members. However, during my tenure, we have had the luxury not to have the
immense concerns of developing and producing the initial Board documentation
and standards, or ensuring that the coalition would survive the formulation
stages and the potential challenges from inside and outside of the Government.
As such, in an effort to more specifically address all concerns on the diverse
issues that FASAB handles, the Board has moved from a consensus approach to a
voting procedure. Those opposing the majority position can go “on record” with
their opposition.
Question: What do you see as FASAB’s role in
most effectively improving Federal financial management in the future?
Mr. Staats: FASAB’s future role will, of course,
be determined by the participating agencies, but particular care should be
given to issues that represent new ground or future concerns. In other words,
FASAB can be up-front in anticipating problems before they arise. One such
issue, as I recall, was the need for standards with respect to the cost of
capital. I recognize that FASAB really did break new ground with respect to
many other issues.
Mr. Mosso: In addition to continuing to explore
the most effective treatment for those areas and issues that are unique to the
Federal Government, I believe that one of FASAB’s major contributions will be
to increase the awareness of the significant developments in Federal accounting
and reporting and their potential to enhance accountability. FASAB already is
undertaking efforts to increase its presence in the academic community and in
the private sector. Just as important, however, is that it continue to reach
out to Federal agencies and organizations to underscore the purpose and benefit
of the accrual-based accounting structure on which the standards are based.
Only when all who prepare, audit, and use Federal financial statements
understand the nature of the information, the need to review and question what
such information means, and the potential of the information for improving the
resource management and stewardship of the Government, will FASAB’s efforts be
fully actualized.
Chair – Elmer B.
Staats, 1991-1997
Department of
the Treasury – Gerald Murphy, 1991-1998
Office of
Management and Budget – Susan Gaffney, 1991
General
Accounting Office – Donald Chapin, 1991-1997
Congressional
Budget Office – James L. Blum, 1991-1998
Defense &
International Agencies – Alvin Tucker, 1991-1997
Non-defense
Agencies – William L. Kendig, 1991-1994
Non-federal
Representative – Martin Ives, 1991-1997
Non-federal
Representative – Cornelius E. Tierney, 1991-1997
Chair – David
Mosso, 1997-present
Department of
the Treasury – Donald V. Hammond, 1998-1999
Department of
the Treasury – Robert Reid, 1999-present
Office of
Management and Budget – Edward J. Mazur, 1991-1993
Office of
Management and Budget – Harold I. Steinberg, 1993-1994
Office of
Management and Budget – Norwood Jackson, 1995-1999
Office of
Management and Budget – Joseph L. Kull, 2000-present
General
Accounting Office – Philip T. Calder, 1997-present
Congressional
Budget Office – Barry B. Anderson, 1999-present
Defense &
International Agencies– Nelson Toye, 1997-present
Non-defense
Agencies – James E. Reid, 1994-1998
Non-defense
Agencies – Kenneth J. Winter, 1999-present
Non-federal
Representative – Donald H. Chapin, 1997-present
Non-federal
Representative – Linda J. Blessing, 1997-1999
Non-federal
Representative – James M. Patton, 1999-present
Executive
Director – Ronald S. Young, 1990-1996
Deputy Executive
Director – Jimmie D. Brown, 1990-1993
Robert W.
Bramlett, 1991-present
Wendy M. Payne,
1991-1996
Richard L.
Fontenrose, 1991-present
M. Lucy Lomax,
1991-present
Richard C. Mayo,
1991-present
Frank Rexford,
1991-1993 (deceased)
Monica R.
Valentine, 1991-present
Richard Wascak,
1991-present
Richard S.
Tingley, 1991-present
Marian
Nicholson, 1991-present
Alice Keels,
1991-1993
Allison Powell,
1993-1997
Executive
Director – Wendy M. Payne, 1996-present
Andrea Palmer,
1997-present
By Donald H. Chapin
1 - Founded
in Law
The Chief Financial Officers Act (CFO
Act) of 1990 passes
and the Central Agencies establish the
Board.
The CFO Act was the
first in a series of legislative efforts to improve the financial management
and systems of the Federal Government. Its provisions, which established the
Chief Financial Officer (CFO) structure, included a pilot program for audited
financial statements. The law also expressed Congress’s continuing interest in
financial reporting by requiring that any proposed capitalization standards be
reported to Congress. Then, the central agencies – the Department of the
Treasury, the Office of Management and Budget (OMB), and the General Accounting
Office (GAO) – set aside their respective legal prerogatives for accounting and
joined together to establish an advisory board, most of whose members would be
knowledgeable of the special needs of Government.
2 - A Fresh
Start
The Board decides to focus on the unique
needs
of the Federal Government.
The
Board’s first substantive act was to reject the General Accounting Office’s
(GAO’s) TITLE II as a starting point for setting accounting standards. The
TITLE II codification of Federal standards was thought to be too close to
private sector standards. A “clean slate” was deemed necessary. The Board’s
second substantive act was to commission a User Needs study. The resulting
Statement of Federal Financial Accounting Concepts 1, Objectives of Federal Financial Reporting, (a) defined users to
include management and Congress in addition to the public, and (b) broadened
the scope of Federal financial reporting to include budgetary integrity,
performance measurement, stewardship and systems and controls.
3 -
Standards for Management and Congress
The Board’s early Standards seek to implement
Statement of Federal Financial Accounting Concepts 1
A
number of the early standards responded to the needs of management and Congress
and to the performance measurement and budgetary integrity objectives. The
standards for cost accounting and loans and loan guarantees were especially
notable in this regard. Those standards sought to facilitate the determination
of the cost of government goods and services and to aid the budget execution
process. Requiring systems support for cost information, a response to the
systems and controls objective, was considered. But, the Board acceded to
arguments made during the exposure period that the required information could
be calculated without incurring the expense of establishing cost accounting
systems.
4 -
Financial Statements for Governance
Disclosure requirements frame information
needed for planning and control.
By
working closely with the Office of Management and Budget (OMB), the Board was
able to set disclosure requirements without infringing on OMB’s ability to
determine the form and content of agency financial statements. The resulting
financial statements report on the budget execution process and on the net
costs of government programs and activities. The Government’s financial
resources and obligations shown in these statements also provided useful
information for the budget. In recommending these standards, the Board
recognized that while the budget remains the principal tool for planning and
control, accrual based information could provide additional useful information
for better governance.
5 -
Stewardship – Another Dimension
Response to the Stewardship Objective
results in
a separate category for reporting and
auditing.
The Board decided that the dollar information
that might be derived from accounting and budgetary systems was insufficient to
report fully on the Government’s stewardship of National defense property,
plant, and equipment (PP&E); Federal land; heritage assets; investments in
human capital, research and development, and infrastructure: and on the
question of whether government resources would be sufficient to support its
programs in the future. The standards it adopted required the use of physical
unit records, condition reporting, performance evaluations, and forecasts. The
Board also concluded that the Office of Management and Budget and the General
Accounting Office should determine the levels of audit assurance for this
stewardship information. Thus, stewardship information became “Required
Supplementary Stewardship Information”, or RSSI. Much of it was reported
separately from the financial statements.
6 -
Incentives
The Board responds to an Administration deadline and
the Agencies respond to demands for a “clean opinion.”
Deadlines
established in the Administration’s “Reinventing Government” document provided
a powerful incentive for the Board to complete in record time what were then
characterized as the “basic standards”, i.e. the first eight standards. This
was achieved in the Board’s first six years. Another incentive to succeed was
the emphasis placed on getting a “clean opinion”. Government agencies strove to
get this good “report card” from the congressional oversight committees and
from the Office of Management and Budget. Thus, the Board’s standards were
implemented faster than they might have been. But, some government agencies
accomplished this without making the systems and control changes necessary to
produce the required information accurately, quickly and on a year round basis.
7 - The Social
Insurance Compromise
An “irreconcilable split” is resolved by a
separate disclosure-based financial statement.
Perhaps
the most difficult question to confront the Board was whether social insurance
“obligations” were liabilities of some sort, or whether they were “transfer
payments” between participants in the various social insurance systems. A
compromise was negotiated in which, for the first time, the Board’s principals
– the Department of the Treasury, the Office of Management and Budget, and the
General Accounting Office – played an active role. The resulting Statement of
Social Insurance for Social Security will show forecast information for the
present value of future benefit payments and future contributions, and, at the
bottom line, the net actuarial imbalance in 75 years. But, the information
presented in that statement will be in sufficient detail for users to compute
the present value of Social Security “obligations” to retirees or to present
participants, including the so-called “intergenerational liability”.
8 -
Recognition as a GAAP Standard Setter
The AICPA becomes a factor in
the standard setting process.
The
Board sought and received from the American Institute of Certified Public
Accountants (AICPA) recognition as a body enTITLEd to establish “Generally
Accepted Accounting Principles” (GAAP). This will enable independent certified
public accountants to opine, where appropriate, that government financial
statements are presented in accordance with GAAP. This recognition raised the
question of the appropriate auditing standards for Stewardship information,
i.e. RSSI, a category of audit assurance not recognized by AICPA auditing
standards. This recognition also affected the operations of the Board. It
modified the requirements for central agency approval of recommended standards.
It also requires the Board to comply with AICPA criteria for continuing
recognition, including matters such as the independence and qualifications of
Board members.
Where FASAB Has Been and
What It Has Done – Part 2
Board Members Reflect on
FASAB’s First 10 Years
As
FASAB celebrates it’s first 10-year anniversary, we asked the current Board
members to give us their thoughts on where FASAB has been and what it has done,
whether it has changed, and what its future is. Their answers follow.
“FASAB has
successfully eliminated the confusion that existed before its creation over the
application of accounting standards to executive branch agencies. In addition,
its open and accessible process of standard setting has succeeded in increasing
the attention and compliance of Federal agencies with accounting standards.”
Barry B. Anderson
"FASAB
has effectively played the role of “an enabler” by providing an accounting
framework specifically tailored for the Federal Government. It has had to deal
with topics that are unseen in the commercial world, such as social insurance,
non-exchange transactions, and defense assets. In creating this framework for
accounting and financial reporting it also has attempted to influence both the
requirements for systems and for information that management will need to
better manage the business of Government."
Phillip T. Calder
“One could say its
greatest contribution is producing a set -- any set -- of accounting standards
that are mutually accepted by OMB and GAO and generally followed in the
preparation of audited financial statements. However, since that could have
been met with TITLE 2 or anything else, I would rather speak to the
distinguishing quality of FASAB's work, which was in creating financial
reporting objectives appropriate for the Federal Government and in developing
new concepts and standards that meet these objectives such as the statement of
net cost, cost accounting standards, the statement of budgetary resources, and
a broad approach to stewardship reporting.”
Joseph L. Kull
"The Board
has had to deal with an impressive breadth of issues: accounting; external
financial reporting (through trying to target diverse users); systems &
controls; financial management; and managerial cost accounting. The challenge
continues to be how to marshall resources and focus efforts to achieve diverse
goals given the limited range of vehicles available for the Board in issuing
its guidance, such as Statements of Federal Financial Accounting Concepts,
Standards, and Interpretations."
James M. Patton
"The Board
has provided a foundation for financial management that drives the CFO
community to consistent objectives and systems. Our requirements help
prioritize the systems requirements and eventually will provide the framework
for timely internal reporting as well as the audited year end reports."
Robert Reid
“The establishment
of the FASAB, in and of itself, was perhaps the most significant contribution
of the Board to improving Federal financial management. Through the
promulgation of federal-wide accounting standards, the Board has laid the
foundation for meaningful, consistent and comparable financial management
accounting and reporting among Federal agencies and the Federal Government as a
whole. It also has become a keystone for restoring public confidence in the
financial management operations of the Federal Government.”
Nelson Toye
“The Federal
Accounting Standards Advisory Board contributes significantly to improved Federal
Government accountability. For example, the Board established comprehensive
accounting standards that serve as a critical framework for improved Federal
financial accountability. Consistent with Board standards, Federal agencies
regularly report to taxpayers and oversight authorities on the use of Federal
tax dollars. The Board also established critical managerial cost accounting
concepts and standards to help guide internal Federal management processes.
Such full cost practices not only support internal management efficiencies but
also support external benchmarking, as well as, more complete external
accountability, including annual external full cost disclosures on key Federal
programs and outputs.”
Kenneth J. Winter
"To
its credit the Board has remained steadfast in formulating standards that are
uniquely suited to the Federal Government environment. It is not recycling
commercial standards but rather is formulating standards that recognize the
unique Federal environment. At the same time, I believe the Board is moving
toward less prescriptive standards and focusing instead on communication of the
most essential information in the most meaningful form."
Philip T. Calder
"Although I am a newer
Board member, I have observed that a major change in FASAB is its increased
overall visibility due to its achieving Rule 203 status through the American
Institute of Certified Public Accountants. As a result of this status, there
also is an increase in FASAB’s visibility in the academic community as the
Board works to increase its outreach program through such efforts as the
mid-year Government & not-for-profit sector meeting and the 2000 American
Accounting Association (AAA) annual meeting. I also have noticed that one facet
of the Board’s support that has not changed over the last 10 years is its staff – there has been substantial staff stability
over time. Such stability provides the Board with the advantage of an
institutional memory that can help overcome some of the problems inherent in
Board turnover."
James M.Patton
"Although I
was not on the Board during its formative years, I have heard some of the more
tenured members of the Board speak to issues surrounding internal control,
systems development, and management reform. I believe that with the increased
reliance on accountability reports and systems self-evaluation the Board’s
emphasis can shift to a more tightly focused view of fair presentation and
essential disclosure. That seems to be the direction we are heading and I
believe that is a good thing. I am not in favor of overly prescriptive
standards because they tend to direct management to one approach at the expense
of genuine communication."
Robert Reid
“Generally
speaking, with the exception of representatives from two agencies, the
composition of the Board in its first six years did not change. With a few
exceptions, the bulk of the initial accounting standards were somewhat
"traditional" and generally mirrored the private sector with one
major exception. The initial Board recognized a need to report a significant
amount of information regarding the application of resources used by, or
resources or property assets entrusted to, the Federal Government on a
stewardship (accountability) report. More recently, the composition of the Board
has changed, almost completely turned over. In its wake, the new Board has been
revisiting the notion of stewardship. Other reversals, and deferrals, also have
occurred regarding other standards or portions of other standards. Such shifts
in philosophy and ideology have had the unintended consequence of causing some
to question whether the Board's deliberations are steadfast. However, such
shifts also point out the Board's ability and willingness to remain flexible
regarding particular standards when faced with new information or new
situations.”
Nelson Toye
“The Board has
continued to evolve over the past several years. At the outset, the Board
focused on establishing a variety of basic Federal financial accounting
concepts and standards. The accounting profession, through the American
Institute of Certified Public Accountants, recognized the Board in 1999 as the
body governing Generally Accepted Accounting Principles (GAAP) for the Federal
Government. The current Board has focused on refining the basic concepts and
standards, as well as extending the concepts and standards to address a variety
of Federal accounting areas, such as social insurance, national defense
property, plant and equipment and stewardship matters. Future Board
deliberations are likely to focus on Federal natural resources, trust funds,
managerial cost accounting and the integration of financial and mission
performance information."
Kenneth J.Winter
“FASAB's
understanding of the differences between Federal and private accounting has
been and will continue to be instrumental in establishing reasonable,
achievable, and appropriate standards for the Federal Government.”
Barry B. Anderson
"We
have only begun the process of communicating vital, reliable information in heavier
doses to citizens, Congress, and management. Each will benefit and each will be
able to make better, more informed decisions in the future. We have thus far
focused mainly on financial reporting. As we combine detailed financial
information with performance results and use the resulting information in the
process of formulating future plans, the decision-making process will
benefit."
Philip T. Calder
“FASAB must figure
out a way to make the information meaningful to users. First, though, I believe
the Board must reassess who the users are, and what information they need. I
believe the users and their needs as perceived back in the early 90's are
different than they are now; the Board may need to stay in a dynamic state
until we better understand what is useful and relevant, and to whom. In the
interim, FASAB needs to continue to discuss and develop standards and/or
concepts in a number of secondary but important areas such as: natural
resources (following-up on a Board commissioned task force report); grants;
performance measures (provided the Board does not attempt to define audit
requirements); and imputed interest on capital (addressed as "cost of
capital" in the Board’s 1996 Invitation for Views).”
Joseph L. Kull
“The
majority of the Board is pragmatic in seeking solutions. However, without
investing future resources to examine the conceptual underpinnings of the
reporting model, it will be difficult to continue to produce guidance that is
comprehensive and coherent.”
James M. Patton
"Our standards
provide the basis for realistic comparisons of agency results with their own
prior years’ results and to other agencies. As our reports mature and our
standards evolve to tackle some of the finer points we will, for the first time
in 200 years, provide real accountability and effective communication with our
constituents. That, coupled with improved systems, will transform Federal
financial management."
Robert Reid
“Over the years,
the Board sometimes has been criticized as not giving enough credence to the
notion of practicality, i.e., do the benefits to be derived exceed the cost of
implementation. By giving additional deliberation to the benefits to be derived
compared to the costs that will be required to deliver those benefits, the
Board can demonstrate that its standards are practical, doable and worth every
penny that it will cost the taxpayer to implement the standards. Additionally,
the Board will continue to build upon the track record that it already has
established and continue to set accounting standards that ultimately provide
meaningful and useful information to the users of financial statements.”
Nelson Toye
“The Board can be
expected to continue to play a key role in future Federal financial management
improvements. The Board's current financial accounting standards framework will
be refined and strengthened. The framework and related concepts and standards
will be integrated into Federal financial management and resources management
(budget) practices. Such strengthened practices will support Agency
efficiencies and improved mission performance, including improved Federal
financial accountability to America's taxpayers.”
Kenneth J. Winter
On September 16, 2000, at the Association of Government Accountants
50th Anniversary Gala Dinner, the Association awarded the
Einhorn-Gary Award to the FASAB. The National President of the Association, W.
A. Broadus, Jr. and the Association’s Executive Director, Charles W. Culkin,
Jr., presented the award to FASAB for its significant contribution to advancing
accountability in the Federal Government. On hand to receive the award were
Elmer Staats, FASAB’s first Chair and David Mosso the current Chair. Also on
hand to join in the celebration were Wendy Payne, the Executive Director of
FASAB, and Lucy Lomax, staff member and an Assistant Director of FASAB.
The award is named after two of the founding members and former
Presidents of the Association of Government Accountants, Raymond Einhorn and T.
Jack Gary, Jr. If you would like to view pictures from the awards celebration,
go to the Association of Government Accountants web site, www. agacgfm.org and
click on the selection, “The AGA 50th Anniversary – A Grand Finale.”
The
Board once again discussed a working draft document TITLEd Preliminary Views on the Role of Required Supplementary Stewardship
Information in the Federal Financial Reporting Model. The Board agreed to
change the TITLE to Preliminary Views on
the Elimination of the Category of Information Called “Required Supplementary
Stewardship Information.” The Board also discussed other minor changes.
A
“preliminary views” document is a step toward an exposure draft, but is not an
exposure draft of a proposed standard. The Board would proceed to a financial
Statement of Standards on this subject only after considering comments on the
preliminary views document and on one or more subsequent exposure drafts of
proposed standards. The Board hopes to publish these preliminary views for
comment before the end of this year. The document will include the alternative
views of two members.
Point
of Contact: Robert Bramlett, 202-512-7355, bramlettr.fasab@gao.gov.
At its October 5 meeting,
the Board discussed responses to the exposure draft, Amendments to Accounting for Direct Loans and Loan Guarantees in
SFFAS 2, issued in May 2000. In the exposure draft, the Board proposed
displaying in financial reports a reconciliation for the subsidy cost allowance
for direct loans and the liability for loan guarantees on a program-by-program
basis for major programs. The exposure draft also contained a number of
technical amendments to SFFAS No. 2, Accounting
for Direct Loans and Loan Guarantees.
The responses to the
exposure draft were mixed. After deliberation, the Board decided to drop the
proposed program-by-program reconciliation because:
¨
Paragraph
11 of Statement of Federal Financial Accounting Standards 18, Amendments to Accounting Standards for
Direct Loans and Loan Guarantees, requires an adequate amount of credit
program information; and
¨
The
reconciliation data might not be useful to users of general-purpose financial
reports, and
¨
The
cost of the requirement might exceed its potential benefits.
The
Board decided to adopt the technical amendments to SFFAS 2. Most of the
amendments involve word changes to make the language in SFFAS 2 consistent with
the standards adopted in SFFAS 18. However, they also include an amendment
concerning the measurement of default costs. The
Board agreed to make the technical amendments effective for periods beginning
after September 30, 2002, with earlier implementation encouraged.
Point of contact: Richard Mayo, 202-512-7356, mayor.fasab@gao.gov.
FASAB to Update Its
Codification
The FASAB is updating its codification of standards to include all concepts, standards, interpretations, technical bulletins, and technical releases issued through FY 2000. The current FASAB codification, Volume 1, Original Statements, published in 1997, contains Statement of Federal Financial Concepts 1 and 2 and Statement of Federal Financial Accounting Standards 1 through 8.
The updated codification will be a two-volume set. Volume 1, Original Pronouncements, will contain standards as originally published. Volume 2 will be FASAB staff’s reorganization of the standards by subject, similar to the Financial Accounting Standards Board’s Current Text. Volume 1 will be issued first; Volume 2 is currently under development.
Volume
1, Original
Pronouncements, will present each concept statement and accounting standard
as a separate chapter. Each chapter will start with a cover page providing the
issue and effective dates of each statement, referencing other relevant
standards in Original Pronouncements,
and listing any interpretations and technical releases that relate to the
statement. A brief summary of the statement and a table of contents referenced
to both page and paragraph numbers will follow the TITLE page. The paragraph
numbers will be the same as in the original statement.
In some cases the concept statements and accounting
standards have been affected by subsequent concept statements and accounting
standards. References will be provided on the TITLE page of each chapter to
direct the reader to the affected paragraphs and indicate the source and nature
of the change. Within the text of the statements, ellipses will alert the
reader to provisions explicitly deleted by subsequent statements. Original
provisions modified or affected by a subsequent statement but not deleted will
be noted on the TITLE page of the chapter and double underlined in the text.
New provisions added by a subsequent statement will not be inserted in the
original statements. The glossaries originally published with each statement
have previously been codified into a single glossary. That glossary will be an
appendix to the codification update.
When completed, Volume 1 of the codification will be
available in PDF format on FASAB’s Web site (www.financenet.gov/fasab.htm).
It also will be printed and distributed to those on FASAB’s print mailing list;
it will be subsequently available for purchase through the Government Printing
Office.
Point of Contact: Richard Fontenrose,
fontenroser.fasab@gao.gov.
2000
December 7-8 (6N30)
2001
February 22 & 23
April 26 & 27
June 18 & 19
August 23 & 24
October 18 & 19
December 13 & 14
Location: General Accounting Office, 441 G Street, NW, Washington, DC 20548. When available, the room number is listed next to the meeting date. Agendas are posted to the FASAB web page one week prior to meetings.
AAPC Upcoming Meetings
2000
November
9
2001
January
18
March 8
May
10
July
12
Sept
13
Nov 8
Location: General Accounting Office, 441 G Street, NW, in Room 4N30, beginning at 1:30 PM. Point of contact: Monica R. Valentine, 202-512-7362, valentinem.fasab@gao.gov,
Note: FASAB News is published by the staff of the Federal Accounting Standards Advisory
Board. This newsletter, highlighting recent Board actions, is issued after
Board meetings to provide the public with an understanding of issues that the
Board is considering. When an article refers to a Board decision, it should be
understood that Board decisions are tentative until FASAB issues a Statement of
Federal Financial Accounting Concepts (SFFAC) or Statement of Federal Financial
Accounting Standards (SFFAS).
Please direct newsletter editorial questions to Lucy Lomax,
202-512-7359, lomaxm.fasab@gao.gov
Please direct FASAB and AAPC administrative questions to Dick Tingley,
202-512-7361, tingleyr.fasab@gao.gov