A NEW FINANCIAL REPORTING MODEL FOR GOVERNMENTAL FUNDSMarch 1, 2017 | IGFOA updates
• Your General Fund reporting could change…significantly!
• What do you think about doing a cash flows statement for your entity-wide statements?
• What about doing a cash flows statement for your governmental funds?
What about a reconciliation between them, like you do for income statements and balance sheets now?
The Government Accounting Standards Board (GASB) is revisiting the format and content of governmental funds like the General and Debt Service funds, and there is potential for very significant changes. What will be the result and impact of adding non-current liabilities, such as outstanding non-capital debt, or net pension liability to governmental funds? Quite possibly many governmental funds will go from a positive fund balance to negative fund balance.
The IGFOA Technical Accounting Review Committee (TARC) has begun to look at the GASB’s Invitation to Comment and the proposed changes to the financial reporting model. There are three models GASB is looking at, and it is expected one of these three will be adopted. NOW is the time for you to influence the GASB’s decisions through the comment process! Why? The invitation to Comment by GASB is the best chance to persuade the Board. Once an Exposure Draft is released, the likelihood of changes is minimal.
TARC encourages IGFOA public sector members to become familiar with what is being proposed in the GASB’s Invitation to Comment. Talk to your auditor or contact a TARC member. Most importantly, submit comments to GASB and be heard! As with GASBS 34 implementation, there will be additional auditing costs to change to the new reporting model. The more comments GASB receives on this proposal, the greater the influence those letters may have on the final standard issued. Stayed tuned for updates!
More information is also available on the GASB website, including tentative board decisions to date which can be viewed at http://www.gasb.org/cs/ContentServer?c=GASBContent_C&pagename=GASB%2FGASBContent_C%2FProjectPage&cid=1176163289827#decisions
GASB Issues Invitation to Comment