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

FASAB: TRANSLATING USER NEEDS TO ACCOUNTING STANDARDS

CIGIE/GAO 2019 Financial Statement Audit Conference May 7, 2019

DIS DISCLA CLAIMER IMER

2

Views expressed are those of the speaker. The Board expresses its views in official publications.

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!

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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]

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CONCEP ONCEPTS TS (SFF FFAC) C) Non-Authoritative Foundation for Developing Standards

• a. STAN

ANDARDS ARDS (SFF FFAS) AS) and Interpret erpretat ations ions

• b. FASAB Tec

echnical hnical Bu Bulletins tins and AICP ICPA A Indust ustry y Aud udit it and Acco ccount unting ing 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

Most Authorit itat ativ ive e Lea east Aut uthor

• rit

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

• f General

nerally ly Acc ccep epted d Acc ccount

• unting

ing Prin incipl ciples es, , Incl cludi ding ng th the Ap Appli lica cation tion of

• f Stan

Standar dards ds Issued d By By th the Fin inanc ancia ial l Acc ccounting

• unting Stan

Standar dards ds Bo Boar ard

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,

• ther 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.

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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.

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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.

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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.

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• 2. HOW DOES FASAB TRANSLATE USER

NEEDS INTO ACCOUNTING STANDARDS?

Potential Project

Three-Year Plan

CONSID SIDER ER INPUT UT

Pre-Proposal RESEARCH ARCH

Board Deliberation

Formal Proposal CONSIDER INPUT

Rinse and Repeat

• r

Finaliz lize e Standa dards ds / Guidanc ance

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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?

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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

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4.

• 4. WHI

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

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PRE PRE-PR PROP OPOS OSAL AL PR PROJE OJECT CTS

• Note Disclosures
• Risk Reporting
• Reporting Model

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NOTE TE DI DISC SCLOSUR OSURE E CO CONCEPT CEPTS

Ov Over ervi view w of

• f Pr

Projec

• ject:

t:

▪ Improve relevance, clarity, consistency, and comparability

• f 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

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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

• rmation
• n ple

leas ase e review w th the Not Note e Discl isclosur

• sure/Mat

/Materi erial alit ity y project

• ject

pag age e at at: : https https:/ ://f /fasa asab.go b.gov/p v/projects

• jects/acti

/active-pr projects

• jects/n

/note_di e_discl closu

• sures/

es/ 16

RI RISK SK REPORTING REPORTING

Ov Over ervie view w of

• f Pr

Project:

• ject:

▪ Risk sk Rep epor

• rting

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

• rting

ting in August 2018 for a holistic approach

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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

• r mo

more re in infor

• rmati

mation

• n plea

ease se re revi view w th the e Ri Risk sk Rep epor

• rting

ting proj

• ject

ect pag age e at at: : http ttps:/ s://f /fas asab ab.g .gov/p v/projects/a

• jects/act

ctiv ive-project

• jects/ri

s/risk sk-assumed assumed-pha phase se-ii/ ii/

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REPORTING REPORTING MODEL MODEL

Ov Over ervi view w of

• f Pr

Projec

• ject:

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?

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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

• ss

s Sim imms ms

For mo more e infor

• rma

mation tion pl plea ease se review w th the e Rep epor

• rting

ting Model el pr project ect pa page ge at: t: ht https:// tps://fas asab ab.go .gov/pr v/projects

• jects/a

/act ctiv ive-pr projects

• jects/repor

/reportin ting-model model-phase phase-i/ i/ and d htt ttps://f ps://fasab.go asab.gov/ v/pr projects/a

• jects/acti

ctive-pr projects/rep

• jects/repor
• rti

ting ng-model del- ph phase se-ii/ ii/

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5.

• 5. WHA

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

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PR PROPOSE OPOSED D GU GUID IDANCE ANCE

• Land
• Liabilities Interpretation
• Materiality
• Conforming Amendments to Technical Release (TR) for

SFFAS 54

• Omnibus Amendments

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ACCO CCOUNTING UNTING AN AND D REPORTING REPORTING OF OF GO GOVE VERNME RNMENT NT LA LAND

Ov Over ervi view w of

• f Pr

Prop

• posal:
• sal:

To ensure consistent accounting treatment and reporting for land holdings while considering user information needs

Prop

• posal:
• sal:

▪ 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

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ACCO CCOUNTING UNTING AN AND D REPORTING REPORTING OF OF GO GOVE VERNME RNMENT NT LA LAND

Statu tatus: s:

▪ Ex Expos

• sur

ure e dr draf aft released on April 30, 2018 ▪ Resp espon

• ndent

dent co comment mments were due on July 30, 2018 ▪ Clar arif ific icat ation ion ses sessi sions

• ns held on October 24 – 25, 2018

▪ Proposal is currently bei eing ng de deliber iberat ated ed by the Board FAS ASAB AB sta staff f me memb mber: er: Do Dome meni nic c Savin ini For

• r mo

more re in infor

• rmati

mation

• n plea

ease se re revi view w th the e La Land nd proj

• ject

ect pag age e at at: : http ttps:/ s://f /fas asab ab.g .gov/p v/projects/a

• jects/act

ctiv ive-project

• jects/go

s/government ernment-la land/ nd/

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LI LIABILI ABILITIES TIES IN INTERPR TERPRET ETATION TION

Ov Over ervi view w of

• f Pr

Prop

• posal:
• sal:

To provide gui uida danc nce regarding cl clea eanu nup co cost st lia iabil ilit ities ies when the component reporting entity responsible for reporting on an asset during its useful life is different from the component reporting entity that will eventually be responsible for environmental remediation upon disposal of that asset.

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LI LIABILI ABILITIES TIES IN INTERPR TERPRET ETATION TION

Statu tatus: s:

▪ Ex Expos

• sur

ure e dr draf aft released on October 17, 2018 ▪ Resp espon

• ndent

dent co comment mments were due on March 11, 2019 ▪ Proposal is currently bei eing ng de deliber iberat ated ed by the Board FAS ASAB AB sta staff f me memb mber: er: Mel elis issa sa Ba Batc tchelor elor For

• r mo

more e in infor

• rmat

mation ion plea ease se revie iew w th the e Ev Eval alua uati tion

• n of
• f Ex

Exis isti ting ng Sta tanda ndards ds proj

• ject

ect pag age e at at: : http ttps:/ s://f /fas asab ab.g .gov/p v/projects/a

• jects/act

ctiv ive-project

• jects/e

s/eval alua uation tion-of

• f-

exi xisti sting ng-st stan andar dards/ ds/

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MA MATER TERIALIT IALITY

Ov Over ervi view w of

• f Pr

Prop

• posal
• sal

▪ Clarify the existing materiality guidance ▪ Proposing concepts on the application of materiality in the federal financial reporting environment. ▪ Concepts statement would ▪ Provide materiality concepts ▪ Specify the scope of materiality ▪ List factors to consider when applying materiality

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MA MATER TERIALIT IALITY

Ma Materia eriality lity Con

• ncep

cepts: ts: Am Amend ending ing SFF FFAC C 1 an and SF d SFFAC C 3

Sta tatus: tus: ▪ Ex Expos

• sur

ure e dr draf aft released on October 15, 2018 ▪ Resp espon

• ndent

dent co comment mments were due on March 11, 2019 ▪ Proposal is currently bei eing ng de deliber iberat ated ed by the Board FAS ASAB AB sta staff f me memb mber: er: Gr Grac ace W e Wu For

• r mo

more re in infor

• rmati

mation

• n plea

ease se re revi view w th the e Note e Di Disc sclosu

• sure/M

re/Mat ateria eriality lity proj

• jec

ect t pag age at: e at: http ttps:/ s://f /fas asab ab.g .gov/p v/projects/a

• jects/act

ctiv ive- proj

• jec

ects/n ts/note_disclos e_disclosures/ ures/

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CO CONFORMING ORMING AME AMENDMENT NDMENTS S TO O TECH ECHNIC NICAL AL RE RELEAS LEASES ES FOR OR LEASES LEASES

Ov Over ervi view w of

• f Pr

Prop

• posal:
• sal:

▪ Provides amendments to existing TRs to acknowledge the guidance in SFFAS 54 ▪ Update terminology in TRs 10 and 16 to conform with changes in SFFAS 54: Leases ▪ Clarify how reporting entities should capitalize the cost of internal use software (IUS), including software licenses ▪ Lease accounting concepts would no longer apply to IUS

29

CO CONFORMING ORMING AME AMENDMENT NDMENTS S TO O TECH ECHNIC NICAL AL RE RELEAS LEASES ES FOR OR LEASES LEASES

Statu tatus: s:

▪ Ex Expos

• sur

ure e dr draf aft released on February 14, 2019 ▪ Resp espon

• ndent

dent co comment mments were due on April 1, 2019 ▪ Proposal is currently bei eing ng de deliber iberat ated ed by the Board FAS ASAB AB sta staff f me memb mber: er: Mon

• nic

ica V a Val alenti entine ne For

• r mo

more e in infor

• rmat

mation ion plea ease se revie iew w th the e AA AAPC PC S SFF FFAS AS 54 54 pr proj

• jec

ect t pag age at: e at: http ttps:/ s://f /fas asab ab.g .gov/a v/about bout-aa aapc/ c/aa aapc-projects/r

• jects/re-sf

sffas as-54 54-leases/ leases/

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OMNIBUS MNIBUS AM AMENDMENT ENDMENTS

Ti Title: tle:

Omnibus Amendments: Rescinding Statement of Federal Financial Accounting Standards (SFFAS) 8 and Amending SFFAS 5, 6, and 49 Ov Over ervie view w of

• f Pr

Prop

• pos
• sal

al: : ▪ Eliminate the required supplementary stewardship information (RSSI) category by rescinding SFFAS 8, Supplementary Stewardship Reporting ▪ Update references to leases in SFFAS 5, SFFAS 6, and SFFAS 49 ▪ A minor change for clarity in SFFAS 5

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OMNIBUS MNIBUS AM AMENDMENT ENDMENTS

Statu tatus: s:

▪ Ex Expos

• sur

ure e dr draf aft released on February 22, 2019 ▪ Resp espon

• ndent

dent co comment mments s were due on April 23, 2019 ▪ Proposal is currently bei eing ng de deliber iberat ated ed by the Board FAS ASAB AB sta staff f me memb mber ers: s: Ros

• ss

s Sim imms ms an and M d Mon

• nic

ica V a Val alen entine tine For

• r mo

more e in infor

• rmat

mation ion plea ease se revie iew w th the e FAS ASAB AB Om Omni nibus us proj

• jec

ect t pag age at: e at: http ttps:/ s://f /fas asab ab.g .gov/p v/projects/a

• jects/act

ctiv ive- proj

• jec

ects/omn ts/omnibu ibus-project/

• ject/

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6.

• 6. WHA

HAT T GU GUID IDANCE ANCE HA HAS S BEEN EEN RE RECENTL CENTLY CO COMPLE MPLETED TED AN AND D WHA HAT T ARE ARE THE HE EF EFFECTIVE FECTIVE DATES? TES?

33

SF SFFAS 5 AS 51: : In Insu sura ranc nce e Pr Prog

• gra

rams ms

• Ef

Effecti ective e for Per eriods s Be Begi ginning nning after er Sep eptembe ember 30, 2018 18

34

SF SFFAS 52 AS 52: : Tax ax Exp Expendi enditur tures es

• Ef

Effecti ective e for Per eriods s Be Begi ginning nning after er Sep eptembe ember 30, 2017

35

SF SFFAS AS 53: 53: Bu Budget dget an and A d Accrual ccrual Reconcili econciliat ation ion

• Ef

Effecti ective e for Per eriods s Be Begi ginning nning after er Sep eptembe ember 30, 2018 18

36

SF SFFAS AS 54: 54: Le Leas ases es

• Ef

Effecti ective e for

• r Per

erio iods ds Be Begin inni ning ng af after er Sep ept t 30 30, 2 , 202 020

(early adoption not permitted)

37

SF SFFAS AS 55: 55: In Inter er-en entity tity Co Costs sts

• Ef

Effecti ective e for

• r Per

erio iods ds Be Begin inni ning ng af after er Sep eptem ember ber 30 30, 20 , 2018

38

Tec echni nica cal Rel elea ease se 19: 9: Rescission of Technical Release 8

Issued and Effective: January 15, 2019

SFF SFFAS AS 56 56: : Cl Class assif ified ied Acti ctivit vities ies

– Issu ssued ed & Ef Effecti ctive Oc Octobe ber r 4, 2018 39

In Interpr erpretation tation of

• f Fed

ederal eral Fi Fina nanc ncia ial Acc ccou

• unti

nting ng Sta tand ndar ards ds 8: 8:

An Interpretation of Statement of Federal Financial Accounting Standards 56, Classified Activities - Issued & Effective: March 15, 2019

St Staf aff f Im Implementa plementation tion Gui Guida dance nce 6. 6.1

Is Issu sued ed & E & Effec ectiv tive e Jul July 1 y 17, 7, 20 2018

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7. . WHY HY IS IS FASAB ASAB EV EVAL ALUATING TING EX EXISTING ISTING ST STAND ANDARDS? ARDS?

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EV EVAL ALUATING TING EX EXISTING ISTING ST STAND ANDARDS ARDS

▪Objective

▪ Identify opportunities to clarify requirements and assess if any requirements should be eliminated

▪Approach

▪ Considering particular topics, especially for requests that benefits clearly exceed costs

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EV EVAL ALUATING TING EX EXISTING ISTING ST STAND ANDARDS ARDS

Statu tatus

▪ Currently considering how to assign liabilities when multiple component reporting entities are involved If If you

• u wi

wish sh to

• prop
• pos
• se

e an an e exi xisti sting ng sta stand ndar ard d or

• r top
• pic

ic to

• be e

e eval alua uated ed Pl Plea ease se co conta ntact ct Mel elis issa sa Ba Batc tchelor elor at at: : Ba Batc tchelorM elorM@f @fasa asab.g b.gov

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8.

• 8. HO

HOW CAN CAN YOU OU GE GET T IN INVOL OLVE VED D IN IN THE HE ST STAND ANDARDS ARDS-SETT SETTING ING PR PROCESS? OCESS?

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GE GET T IN INVOL OLVE VED D BY:

• Reviewing Three-Year Plan and providing comments
• Joining work groups and task forces
• Providing education sessions in your areas of expertise
• Completing FASAB surveys
• Attending Board meetings – in person or virtual
• Submitting answers to exposure drafts
• Submitting technical inquiries when necessary

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9.

• 9. HO

HOW TO O ST STAY CO CONNECTED! NECTED!

• Sign up for our listserv
• Listen to FASAB Bits and Bytes podcast
• Follow us on Twitter
• Follow us on LinkedIn

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CO CONT NTACT CT IN INFORMA ORMATION TION

Robin Gilliam Assistant Director gilliamr@fasab.gov 202-512-7356 Leigha Kiger Communications Specialist kigerl@fasab.gov 202-512-7358 47