Two AICPA panels – the AICPA State and Local Government Expert Panel (Panel) and the AICPA Private Companies Practice Section Technical Issues Committee (TIC) – recently submitted comments to the Governmental Accounting Standards Board (GASB) on its Exposure Draft (ED), Implementation Guidance Update —2020. The ED amends eight existing questions and answers and adds several new questions and answers in the areas of The Financial Reporting Entity, Accounting and Financial Reporting for Certain Investments and for External Investment Pools, Fiduciary Activities, Leases, Certain Asset Retirement Obligations, and Conduit Debt Obligations.
In its January 30, 2020 letter, the Panel raised concerns that proposed question 4.1 is a change or an interpretation of GASB Statement No.14, The Financial Reporting Entity. Therefore, the Panel recommended the Board remove this question from the final Implementation Guide and address it through the issuance of category A generally accepted accounting principles (i.e., an amendment to GASB Statement No. 14). The Panel also recommended that the Board delete certain questions where the fact patterns were too simplistic and revise others where the fact patterns could result in confusion and diversity in practice. Several additional questions on leases were also provided by the Panel with a suggestion that the Board consider adding the questions to future Implementation Guidance.
TIC’s January 30, 2020 letter also recommended that the Board consider revising certain questions where the fact patterns and answers could be considered misleading. TIC also suggested adding some additional questions to address some of the more common practice issues that have arisen, among other recommendations.