GASB proposal on grants too narrow, says AICPA committee.
The comment letter, signed by GAAC chairman George A. Scott, noted that the original discussion memorandum issued in 1992 included all grants and financial assistance. The ED, on the other hand, "carved out three of the less significant topics covered in the discussion memorandum" for standard setting: pass-through grants, food stamps and on-behalf payments.
"The committee discourages the GASB from issuing standards in such a piecemeal manner and supports the alternative view that the board has missed an opportunity to establish a sound foundation for reporting all grants and other financial assistance transactions," wrote Scott.
The committee asked GASB to return to the broader issues of measurement focus, basis of accounting and the financial reporting model of government and business-type activities before taking on limited-scope projects. "Until the broader issues are resolved by the GASB, limited-scope projects such as this ED serve only as interim guidance and may change, potentially causing unnecessary cost and confusion," the letter said.
Other concerns. If guidance on noncash financial assistance is to be relevant, GAAC asserted, the proposal should not be limited to food stamps. Instead, the GASB also should include guidance on other significant types of noncash programs, including commodities and vouchers, in the scope of the final standard.
Moreover, the final standard should not limit the guidance regarding on-behalf payments to salaries and fringe benefits. Guidance on liabilities associated with other on-behalf payments and how they should be reported also should be included in the final standards, GAAC recommended.
The ED, which is subject to revision, is the first in an expected series of proposed standards addressing government grants. Copies may be purchased from the GASB order department by calling (203) 847-0700, ext. 10.
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|Title Annotation:||Government Accounting Standards Board|
|Publication:||Journal of Accountancy|
|Article Type:||Brief Article|
|Date:||May 1, 1994|
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