The American Institute of CPAs’ (AICPA) State and Local Government Expert Panel and Private Companies Practice Section (PCPS) Technical Issues Committee (TIC) submitted comment letters to the Governmental Accounting Standards Board (GASB) that support the Board’s Exposure Draft (ED), Blending Requirements for Certain Component Units.
The State and Local Government Expert Panel wrote in its October 6 letter that it supports the “Board’s proposal to amend GASB Statement No. 14, The Financial Reporting Entity, to add a new blending criterion for component units organized as not-for-profit corporations in which the primary government is the sole corporate member.”
The PCPS Technical Issues Committee wrote in its October 6 letter that “TIC is supportive of the conclusions reached in the ED. Governments and practitioners often struggle with the decision between discrete presentation and blending, and this guidance will be helpful. However, TIC recommends the clarification of certain paragraphs before the proposal is finalized to ensure that the standard will be applied as the Board intended.” TIC is seeking more guidance for component units organized as limited liability companies and clarification of the term “sole corporate member.”