FASAB: TRANSLATING USER NEEDS TO ACCOUNTING STANDARDS DIS DISCLA - PowerPoint PPT Presentation

CIGIE/GAO 2019 Financial Statement Audit Conference May 7, 2019 FASAB: TRANSLATING USER NEEDS TO ACCOUNTING STANDARDS

DIS DISCLA CLAIMER IMER Views expressed are those of the speaker. The Board expresses its views in official publications. 2

AGE GEND NDA A – LEA LEARNI RNING NG OB OBJECTIVE JECTIVES 1. What is the GAAP hierarchy for federal reporting entities? 2. How does FASAB translate user needs into accounting standards? 3. What is in the Annual Report and Three-Year Plan? 4. Which projects are in the pre-proposal stage? 5. What guidance has been proposed? 6. What guidance has been recently completed and what are the effective dates? 7. Why is FASAB evaluating existing standards? 8. How can you get involved in the standards-setting process? 9. How to stay connected! 3

1. . WHA HAT T IS IS THE HE GAA AAP P HI HIERAR ERARCHY CHY FOR OR FE FEDERAL DERAL REPORTING REPORTING EN ENTITIES? TITIES? 4

FEDERAL GAAP HIERARCHY [SFFAS 34] CONCEP ONCEPTS TS (SFF FFAC) C) a. STAN ANDARDS ARDS (SFF FFAS) AS) and Interpret erpretat ations ions Most Non-Authoritative Authorit itat ativ ive e Foundation for b. FASAB Tec echnical hnical Bu Bulletins tins and Developing AICP ICPA A Indust ustry y Aud udit it and Acco ccount unting ing Standards Gu Guides es cleared by FASAB c. Tec echnical hnical Releas eleases es of the Accounting and Audit Policy Committee (AAPC) of the FASAB d. Staf taff Impl plemen ementa tation tion Gu Guidance dance published by FASAB Lea east Aut uthor orit itat ativ ive Note: e: For more e det detail ails s pl plea ease se see ee SFF FFAS 34: The Hie ierarchy of of General nerally ly Acc ccep epted d Acc ccount ounting ing Prin incipl ciples es, , Incl cludi ding ng th the Ap Appli lica cation tion of of Stan Standar dards ds Issued d By By th the Fin inanc ancia ial l Acc ccounting ounting Stan Standar dards ds Bo Boar ard 5

CATEGORY A: ST STAND NDARDS RDS (SF SFFAS) AS) AND INT NTERP RPRET RETATI TIONS ONS Sta tanda ndards ds Using a due process and a consensus building approach, the Board promulgates accounting standards after considering the financial and budgetary information need of Congress, executive agencies, other users of federal financial information, and comments from the public. There are 56 standards. In Interpr erpretations tations Interpretations clarify original meaning, add definitions, and provide other guidance for existing SFFASs. There are 8 Interpretations. 6

CATEGORY B: TECHN HNICAL CAL BU BULL LLETI ETINS NS AND AICPA IND NDUSTR USTRY Y AUD UDIT AND ND A ACCOU OUNTIN NTING GUI UIDE DES CLEARED BY FASAB Tec echni nica cal Bu Bulleti tins ns Technical bulletins provide guidance for applying statements and interpretations and resolving issues not directly addressed by them. Technical bulletins are used when the nature of an issue does not warrant more extensive due process. They are generally in question and answer format. There are 10 Technical Bulletins. 7

CATEGORY C: TECHN HNICAL CAL RE RELE LEASE SES OF THE ACCOUNTING AND AUDITING POLICY COMMITTEE (AAPC) OF THE FASAB Tec echni nica cal Rel elea ease ses The Accounting and Auditing Policy Committee (AAPC) provides implementation guidance through technical releases that are reviewed and published by the FASAB. There are 19 Technical Releases. 8

CATEGORY D: ST STAFF FF IMPLE LEMENT MENTATION TION GUI UIDANC NCE (SIG) PUBLISHED BY FASAB Sta taff f Im Impleme ementation ntation Gu Guid idan ance ce ( (SIG IG) The staff provides implementation guidance. Such guidance is issued if a majority of the Board does not object. There are 3 SIGS. 9

2. HOW DOES FASAB TRANSLATE USER NEEDS INTO ACCOUNTING STANDARDS? Potential Project Rinse and Repeat or Finaliz lize e Board Standa dards ds / Deliberation Three-Year RESEARCH ARCH Guidanc ance Plan Formal CONSIDER INPUT Proposal CONSID SIDER ER Pre-Proposal INPUT UT 10

3. 3. WHA HAT T IS IS IN IN THE HE AN ANNU NUAL AL REPORT REPORT AN AND D THREE HREE-YEAR YEAR PLA PLAN? N? 11

AN ANNU NUAL AL REP REPORT ORT AN AND THR D THREE EE-YEAR YEAR PL PLAN AN Statement from the Chair • • Three-year plan for the technical agenda • Status of current projects • Potential projects 12

4. 4. WHI HICH CH PR PROJEC OJECTS S ARE ARE IN IN THE HE PRE PRE-PR PROPO OPOSAL AL ST STAGE? GE? 13

PRE PRE-PR PROP OPOS OSAL AL PR PROJE OJECT CTS • Note Disclosures • Risk Reporting • Reporting Model 14

NOTE TE DI DISC SCLOSUR OSURE E CO CONCEPT CEPTS Ov Over ervi view w of of Pr Projec oject: t: ▪ Improve relevance, clarity, consistency, and comparability of note disclosures among the federal entities ▪ Two-phase approach to research note disclosure principles and related topics ▪ Phase I concentrates on developing conceptual principles ▪ Conceptual Principles: note disclosure goals, note content, and disclosure relevance & objectives 15

NOTE TE DI DISC SCLOSUR OSURE E CO CONCEPT CEPTS Statu tatus: s: ▪ Working group formed in August 2017 ▪ Survey conducted in September 2017 ▪ Phase I: Develop a principle framework outline ▪ Board is deliberating on the draft concepts with working group input FASAB AB staf taff me member: mber: Grac ace e Wu For r mo more e inf nformati ormation on ple leas ase e review w th the Not Note e Discl isclosur osure/Mat /Materi erial alit ity y project oject pag age e at at: : https https:/ ://f /fasa asab.go b.gov/p v/projects ojects/acti /active-pr projects ojects/n /note_di e_discl closu osures/ es/ 16

RI RISK SK REPORTING REPORTING Ov Over ervie view w of of Pr Project: oject: ▪ Risk sk Rep epor orting ting is s in ph phase se II ▪ To provide concise, meaningful, and transparent information regarding material fin inan anci cial al im impac act of significant risks - other than events covered in SFFAS 51 - to major federal programs & significant risk events ▪ Ph Phas ase e I w I was as co completed ed January 18, 2017, with the issuance of SFFAS 51, Insurance Programs ▪ Risk Assumed renamed to Ri Risk sk Rep epor orting ting in August 2018 for a holistic approach 17

RI RISK SK REPORTING REPORTING Status: tatus: ▪ Conducted interviews with preparers ▪ Presented interview findings & recommendations at the Board meeting on Wednesday, April 24, 2019 ▪ Received approval from Board to amend SFFAS 15 for risk reporting in MD&A and forward-looking information For or mo more re in infor ormati mation on plea ease se re revi view w th the e Ri Risk sk Rep epor orting ting proj oject ect pag age e at at: : http ttps:/ s://f /fas asab ab.g .gov/p v/projects/a ojects/act ctiv ive-project ojects/ri s/risk sk-assumed assumed-pha phase se-ii/ ii/ 18

REPORTING REPORTING MODEL MODEL Ov Over ervi view w of of Pr Projec oject: t: ▪ Phase I ▪ Improving MD&A ▪ Reporting stewardship investments ▪ Phase II ▪ Considering the reporting model of the future ▪ Are user needs impacted by changes in technology such as di digit itiz ized ed da data ta and da data ta vis isua ualiz izat ation ions? 19

REPORTING REPORTING MODEL MODEL Status: tatus: ▪ Developing proposal to amend SFFAS 15 ▪ Permit flexibility in organizing required content ▪ Proposing to rescind SFFAS 8 ▪ Eliminate RSSI category FAS ASAB AB sta staff f me memb mber: er: Ros oss s Sim imms ms For mo more e infor orma mation tion pl plea ease se review w th the e Rep epor orting ting Model el pr project ect pa page ge at: t: ht https:// tps://fas asab ab.go .gov/pr v/projects ojects/a /act ctiv ive-pr projects ojects/repor /reportin ting-model model-phase phase-i/ i/ and d htt ttps://f ps://fasab.go asab.gov/ v/pr projects/a ojects/acti ctive-pr projects/rep ojects/repor orti ting ng-model del- ph phase se-ii/ ii/ 20

5. 5. WHA HAT T GU GUID IDANCE ANCE HA HAS S BEEN EEN PR PROPOSE OPOSED? D? 21

PR PROPOSE OPOSED D GU GUID IDANCE ANCE • Land • Liabilities Interpretation Materiality • • Conforming Amendments to Technical Release (TR) for SFFAS 54 Omnibus Amendments • 22

ACCO CCOUNTING UNTING AN AND D REPORTING REPORTING OF OF GOVE GO VERNME RNMENT NT LA LAND Ov Over ervi view w of of Pr Prop oposal: osal: To ensure consistent accounting treatment and reporting for land holdings while considering user information needs Prop oposal: osal: ▪ reclassify G-PP&E land as a non-capitalized asset ▪ clarify definition for the stewardship land category ▪ require reporting of G-PP&E land and SL using three predominant use sub-categories: conservation and preservation land; operational land; and commercial use land ▪ require consistent and comparable disclosures of information for land 23