national association of state auditors, comptrollers and treasurers gasb update the views expressed...
TRANSCRIPT
1
National Association of State Auditors, Comptrollers
and Treasurers
GASB UpdateThe views expressed in this presentation are those of Chairman
Vaudt and Mr. Bean. Official positions of the GASB are determined
only after extensive due process and deliberation.
© Copyright 2014 by Financial Accounting Foundation, Norwalk,
CT
3
What Has Been Accomplished and What Remains To Be Done
Improving relationships Enhancing communications and implementation tools Identifying hot button financial reporting issues Focusing on the big issues
5
Relationships—Looking Out and Looking In
External- Meetings with over 30 organization executives and
congressional leaders in the past year Strengthening already strong relations (for example, NASACT) Reintroducing GASB to some (for example, NGA, NCSL, CSG, ASHTO) Establishing relations with others (for example, National School Board
Association) - Not a one-time drive by- Great standards are built on trust
Internal- Breaking down silos to increase efficiency
Both Boards can leverage off the other- Still need to always recognize why the GASB exists
Board and staff expertise in the public sector
7
Introducing New Forms of Communication and Improving Others
GASB Outlook- A new form of communication directed at the “C” suite- Detailed communications are still available for the techies
Webcasts focused on due process documents- Fair value- Other postemployment benefits- Many more to come
New website- Timely information on projects- Technical inquiry portal - Implementation tools
8
Enhanced Implementation Tools
Pension Implementation Tool Kit- Fact sheets- Plain-language articles- Podcasts and video discussions of specific provisions- Statements and Implementation Guides
More to come
10
What is Hot?
2a7-like pools- Accessing the impact of the new Securities and Exchange
Commission Regulations- Board will decide whether this topic should be added to the
pre-agenda research activities on August 22- A decision to add a topic to conduct pre-agenda research is
not intended to signal a change to the current standards
Direct lending (bank loans versus bonds)- Primarily a local government issue- Determining whether current note disclosure and management
discussion and analysis requirements are adequate
12
Major Technical Agenda and Pre-Agenda Research Topics
Financial reporting model reexamination Other postemployment benefits Fair value measurement and application Leases Fiduciary responsibilities
13
Reporting Model—Where Have We Been
Statement 34—released in 1999 Everything on the table, but no predetermined outcomes Research to date- Literature review- Archival research- Research roundtables- Preparer and auditor surveys
14
Reporting Model—Where Are We Going
Modified approach survey Financial statement user survey Interviews Final research report Board decision—does it move to the current technical
agenda?
15
OPEB—Where Have We Been
Due process- Exposure drafts approved in June 2014
Built on the new pension standards- Arrangements that do not meet the definition of a trust- Healthcare inflation rate- Discount rate
16
OPEB—Where Are We Going
Due process- Public hearings will be held in September
Release and effective dates- Final Statements expected in June 2015- Effective dates
Plans—June 2017 Employers—June 2018
Will complete the suite of new postemployment benefit standards
17
Fair Value—Where Have We Been
How fair value is defined and measured- FASB standards highly leveraged- Definition is exactly the same as the FASB and IASB
Based on an exit value notion
Application- Limited in this proposed Statement to investments- Investment is specifically defined
When is fair value no longer appropriate- Acquisition value
Note disclosures—how is fair value determined
18
Fair Value—Fundamental Definitions
Fair Value Definition- The price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at the measurement date.
Investment Definition- A security or other asset that a government holds primarily for
the purpose of income or profit and its present service capacity is based solely on its ability to generate cash or to be sold to generate cash
19
Fair Value—Where Are We Going
Final Statement scheduled to be approved in February 2015
Effective date—June 2016
20
Leases—Where Have We Been
Single approach—right of use- No classification of leases into operating/capital or other
categories- Underlying assumption that leases are financings
Practicality exception—short-term lease- Lease that, at the beginning of the lease, has maximum
possible term under the contract, including any options to extend, of 12 months or less
Lessor—symmetry with lessee accounting
21
Leases—Where Are We Going
Issues still to be deliberated- Small items exemption
Due process- Preliminary views expected to be released in November 2014- Field test - Public hearings—April 2015
22
Fiduciary Responsibilities—Where Have We Been
Fiduciary definition Custodial funds—A new fund type that includes any
fiduciary arrangement that is not governed by a formal trust agreement or equivalent arrangement
Fiduciary activities continue to be reported as basic financial statements
23
Fiduciary Responsibilities—Definition
A government that controls assets:- (1) in accordance with a trust agreement or equivalent
arrangement in which the beneficiaries are (a) employees of the financial reporting entity, or (b) organizations or other governments that are not part of the financial
reporting entity, or - (2) outside of a trust agreement or equivalent arrangement and
(a) the beneficiaries are individuals, or private organizations or other governments that are not part of the financial reporting entity, or
(b) the resources are from a pass-through grant for which it does not have administrative or direct financial involvement.
No administrative or direct financial involvement
24
Fiduciary Funds—Where Are We Going
Due process- Preliminary views expected to be released in November 2014- Field test- Public hearings—April 2015