FASAB gives guidance to preparers of federal entities' financial reports.
The ED establishes guidelines for defining the makeup of the various types of reporting entities and identifies types of financial reports for each, suggesting the kind of information they need to include. It also presents sample formats for financial statements.
To help identify the components that should be included as part of a reporting entity, the ED offers a number of criteria. For example, any organization, program or budget account included in the federal budget section, "Federal Programs by Agency and Account," should be considered part of the government as well as part of the organization or program with which it appears, according to the ED.
The ED also says a reporting entity's financial reports should include amounts attributable to its activities, even though they are recorded elsewhere. This is particularly important for costs associated with the use of human resources as well as for costs of services provided by other reporting entities, such as computer services provided by another unit.
According to the FASAB, the guidelines may be used by all organizations within the executive branch, including cabinet-level departments, independent agencies (which report directly to the president), commissions and corporations that prepare general purpose financial reports. It will also be useful to preparers, auditors and users of federal agencies' financial statements. (The ED does not name the entities that must prepare and issue financial statements because that responsibility belongs to the Congress, the Office of Management and Budget and other organizations providing oversight and resources.)
Most of those who responded during the comment period--chief financial officers, inspectors general, federal financial managers, academics and others--were "generally in agreement with the overall concepts," according to Richard Fontenrose, FASAB project manager. "Many would prefer to see some of the information presented in the ED as supplemental, rather than part of the basic statements."
Public hearings on the ED are scheduled for November 29 and 30, and a final statement is expected to be issued during the first quarter of 1995. For additional information about the hearings, call Richard Fontenrose at the Federal Accounting Standards Advisory Board, Washington, D.C., at (202) 512-7358. To receive a copy of the ED, call the FASAB order department at (202) 512-7350.
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|Title Annotation:||Financial Accounting Standards Advisory Board|
|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||Nov 1, 1994|
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