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Financial Reporting and Regulatory Update

Third Quarter 2020

From the GASB

Proposals

Financial reporting model improvements

On July 24, 2020, the GASB issued an exposure draft of a proposed statement, “Financial Reporting Model Improvements,” designed to improve key components of state and local government annual financial reports.

The exposure draft proposes improvements devised to enhance the effectiveness of financial reports in providing information essential for making decisions and assessing a government’s accountability and addresses certain application issues.

The exposure draft includes proposals that would establish or modify existing accounting and financial reporting requirements related to:

  • Management’s discussion and analysis
  • Unusual or infrequent items
  • Application of the short-term financial resources measurement focus and accrual basis of accounting in governmental funds (replacing the existing current financial resources measurement focus and modified accrual basis of accounting)
  • Presentation of governmental fund financial statements
  • Presentation of the proprietary fund statement of revenues, expenses, and changes in fund net position
  • Budgetary comparison information

The GASB indicates that the proposed changes would improve financial reporting by increasing the consistency, clarity, and relevance of what and how certain information would be reported in the financial statements and management’s discussion and analysis.

Comments are due to the GASB by Feb. 26, 2021.

COVID-19 resources

GASB emergency toolbox

The GASB has posted a toolbox on its website to assist governments and other stakeholders in quickly identifying authoritative GASB guidance that could be relevant to the current circumstances related to COVID-19. In addition, the toolbox includes links to other professional organizations from which stakeholders might get nonauthoritative recommendations for financial reporting and other activities as governments deal with the pandemic’s effects.

For more information contact Crowe.