OCBOA and Supplementary Information 

An Article by the AICPA's Governmental Audit Quality Center 
Published May 07, 2013

Special purpose financial statements as discussed in AU-C section 800, Special Considerations-Audits of Financial Statements prepared in Accordance with Special Purpose Frameworks, (AICPA, Professional Standards) may be accompanied by information that a designated accounting standard setter requires to accompany an entity’s basic financial statement.  AU-C section 730, Required Supplementary Information (AICPA, Professional Standards), defines required supplementary information (RSI) as information that a designated accounting standard setter (a body designated by the AICPA Council to establish generally accepted accounting principles (GAAP) and limited to the Financial Accounting Standards Board, Governmental Accounting Standards Board (GASB), the Federal Accounting Standards Advisory Board, and the International Accounting Standards Board) requires to accompany an entity’s basic financial statements; however, a designated GAAP accounting standard setter considers the information to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context.  In addition, authoritative guidelines for the methods of measurement and presentation of the information have been established by these bodies.

Because other comprehensive bases of accounting (OCBOA) and financial reporting standards have not been established by GASB (that is, the designated GAAP standard setter for state and local governments in the US), any such RSI required by GASB in GAAP-basis financial statements is not considered RSI that must accompany OCBOA financial statements.  Therefore, in OCBOA financial statements for state and local governments, there are no RSI requirements because there is no designated standard setter for such OCBOA frameworks.   However, state and local government financial statement preparers “may include” such GAAP-RSI in their OCBOA financial statements.  In such circumstances, the information would be considered voluntary supplementary information or other information for purposes of OCBOA basic financial statements.

For additional guidance on preparing financial statements for governmental entities under OCBOA, please refer to the AICPA Practice Aid, Applying OCBOA in State and Local Governmental Financial Statements.  The professional guidance on OCBOA financial statements is limited and sometimes confusing and this practice aid makes sense of the applicable professional standards and provides practical guidance.


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