IN THIS ARTICLE, I WILL TALK ABOUT SOME OF THE KEY THINGS the Governmental Accounting Standards Board is working on and what’s on the horizon for the GASB. But before I do, there’s a matter of concern I would like to address. State and local governments are dealing with significant resource challenges, including workforce shortages. We know when we add to or change Generally Accepted Accounting Principles (GAAP), we are adding to those resource challenges. With this in mind, we are committed to not undertaking any new project unless the resulting change would represent a meaningful, substantial improvement in governmental financial reporting and those resulting benefits outweigh the costs and burdens we are placing on those who must implement the change. If you would like to talk with us about this, please reach out. Project Milestones The GASB is on track to issue or review the following documents in the second half of 2023: A new standard on the disclosure of certain governmental risks, An exposure draft on the classification of nonfinancial assets, and A post-implementation report detailing how the pension standards are working in practice. The Board also recently added a new project on accounting and financial reporting for infrastructure. Each of the key areas are highlighted below. Certain Risk Disclosures This standard will provide disclosure requirements for two categories of risk that governments face: concentrations (such as a principal employer) and constraints (such as a cap on property tax amounts). Providing financial statement users with information about these kinds of vulnerabilities would have a meaningful impact on their decision making and assessments of accountability. The Board plans to issue this standard in the third quarter. Nonfinancial Assets The GASB is reconsidering the existing classification of nonfinancial assets and other related sub-classifications, including capital assets or intangible assets. In our outreach, users told us that separate presentation or disclosure of different types of nonfinancial assets is important to them. We will issue the proposal for public comment in the third quarter and look forward to the feedback we receive on the types of improvements we are considering. Pensions The GASB’s pension standard issued in 2012 represented a monumental change in how governments report those significant liabilities. Reviewing the pension standards now that they’ve been in place for several years is critical to making sure they are functioning as intended. The final report on what we call “the post-implementation review” of the pension standards will be released to the Board and to the public before the end of the year. It will provide information on how the standards are working and what areas could potentially be improved. The Board will carefully evaluate the findings to determine whether a project addressing any potential changes to the pension standards is needed. We appreciate all our stakeholders who took the time to share their perspective in this important review process. That feedback is the lifeblood of the review—and helps ensure we come to the right decision going forward. The report is due for release in the fourth quarter of 2023. Infrastructure The research we have conducted over the last several years on capital assets, including infrastructure assets, has looked broadly at these areas across the full financial reporting model. Many people shared their perspective with us on how the model is working, what problems and challenges they see, and what information they are not receiving or could be improved. After carefully evaluating the staff’s research findings this spring and after taking into account the high level of interest from our advisory council, the Board made the decision to add a related project to the agenda focusing on infrastructure assets, which includes things like highways and sewer systems. Board deliberations on the project will begin shortly. WHAT CAN WE EXPECT FROM GASB IN THE SECOND HALF OF 2023? BY JOEL BLACK, CHAIRMAN, GOVERNMENTAL ACCOUNTING STANDARDS BOARD 17 www.nescpa.org
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