The GASB proposes new concepts
GASB presents proposals for improvements to the financial reporting model. The proposals aim to make the model more effective in providing information necessary for decision-making and assessing a government’s accountability.
The proposed improvements include:
- A short-term financial resources measurement focus for governmental funds that recognizes short-term transactions and other events when incurred and long-term transactions and other events when due.
- A format for governmental fund financial statements that distinguishes between current and long-term resource flows.
- Clarified explanations of operating and nonoperating revenues and expenses.
- An additional subtotal in proprietary fund financial statements for operating income or loss, and noncapital subsidies.
- Presentation of all budgetary comparison information as required supplementary information and required presentations of two variance columns.
- Communication of major component unit information either in the governmentwide statements or in combining financial statements.
- A new schedule of governmentwide expenses by natural classification as supplementary information in comprehensive annual financial reports.
The main reason the board is trying to provide better information to financial statement users. These proposals will enhance the value and clarity in the data that will be reported in financials.