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Recent News & Blog / GASB - Upcoming changes to reporting model and basis of accounting

The Governmental Accounting Standards Board (GASB) is in the process of making significant changes to governmental financial statements and the underlying basis of accounting and has issued several documents for public comment. The GASB standard setting process includes issuing multiple documents in advance of issuing a final statement/standard that provide the public an opportunity to review standards in draft format, see the direction GASB is headed, and provide feedback to the standard setting process. These current drafts relate to improving the financial reporting model and recognition of elements in the financial statements and will likely have a significant impact on the existing financial reporting model utilized by governmental entities.

The goal of this process is to improve financial reporting by enhancing comparability and understandability in financial reporting by state and local governments in several ways, as well as by providing additional decision-useful information. The following issues are being considered:

  • Changes to requirements for management’s discussion and analysis
  • Adding reporting for unusual or infrequent items
  • Changes to reporting classifications in proprietary fund statement of revenues, expenses, and changes in fund net position
  • Requiring budgetary comparison information to be shown as required supplementary information (RSI) and adding variance analysis as notes to RSI
  • Providing concepts definition of elements of the financial statements to provide a basis for future standards
  • Providing a framework/methodology for determining the proper categorization of revenue and expense transactions

While each of the above items may not be applicable to all governmental entities, we wanted to make you aware of the potential changes and impact it may have to your financial statements in the future.

These draft standards will likely become effective over the next 2-3 years. We will continue to monitor the progress of those items through GASB and will communicate in the future once the statements are issued. 

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