The American Institute of CPAs (AICPA) provided comments to the Governmental Accounting Standards Board (GASB) Invitation to Comment (ITC), Financial Reporting Model Improvements – Governmental Funds. The AICPA committees that were involved in these advocacy efforts were the State and Local Government Expert Panel (SLGEP) and Private Companies Practice Section (PCPS) Technical Issues Committee (TIC).
GASB has begun a multi-year project to reexamine the existing financial reporting model established by GASB Statement No. 34, Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local Governments. This ITC is an early stage due process document relating to this project.
The ITC asked respondents for feedback on three possible alternative recognition approaches for governmental fund financial statements: Near-term financial resources; Short-term financial resources; and Long-term financial resources. Both the SLGEP’s letter and TIC’s letter indicated support for the near-term financial resources approach for governmental funds. Both committees also responded to numerous other questions posed in the ITC.
Members of the SLGEP and TIC will participate in the GASB’s public hearings on this project. Given the significant impact this project will have on governmental reporting, individual members or their firms or organizations should monitor this project. The GASB is expected to issue a follow-up due process document on governmental funds in the second half of 2018.