OECD
Accruals Symposium
FASAB’s Conceptual Framework
Wendy M. Comes
March 6, 2006
Disclaimer
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Remarks represent the views of the speaker.
Official positions of the FASAB are only
presented in official publications.
One Framework?
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"The public and private sectors are alike in all unimportant
respects."
 attributed to Wallace Sayre
"The objectives of financial reporting are not immutable - they
are affected by the economic, legal, political, and social
environment in which financial reporting takes place."
 Financial Accounting Standards Board's CON1
“Except for differences in terminology and circumstances …,
these objectives are the same.” – comparing one of several
pairs of objectives.
 Financial Accounting Standards Board’s CON4
comparing business and non-business reporting
objectives.
One Framework?, continued
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“Perhaps the overriding lesson is that implementing accruals
cannot be seen as a technical accounting exercise. It needs to
involve a ‘culture change’ in government and be linked with
wider public management reforms. For accruals to be
worthwhile and successful, the new information that accruals
brings forth needs to be used to improve decision-making in
government. This change will not necessarily happen
automatically. It needs to be actively promoted, especially at the
level of policy makers and senior officials.”
 Accrual Accounting and Budgeting, Key Issues and
Recent Developments, 23rd Annual Meeting of OECD
Senior Budget Officials
Key Benefits of Sector Specific
Standard Setters in the US
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Communication
Priorities aligned
Perception and participation
Pace of change
Ability to adopt practices aligned with the
budget when objectives match
Current Framework
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Objectives
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Entity and Display
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Entity issues described in terms of control and deal with particular federal
issues such as the Federal Reserve
Display section is largely descriptive and acknowledges OMB authorities
not delegated to FASAB.
Management’s Discussion and Analysis
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Tailored to the federal government and the CFO Act
Discussion of the environment, budget and accountability
Internal and external users
Importance of budget and relationship to budget information
Guidance and requirements
Intended Audience and Qualitative Characteristics for the
Consolidated Financial Report
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A report to the citizens and expert intermediaries
Finding the right length and focus
Why FASAB Undertook a Conceptual
Framework Project
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New members found the existing standard
setting tools inadequate
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Broad objectives
Incomplete element definitions
Questions about the role of RSI (RSSI) versus
recognition
Many are interested in an assessment of
how well we’ve met the reporting objectives
Conceptual Framework
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Objectives and Qualitative Characteristics
Elements and Recognition Criteria
Reporting Model
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Management’s Discussion & Analysis
Statements, Notes and RSI
Other (OAI, Performance Information & Control)
Entity (including a companion standard)
Measurement Attributes
Objectives
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Budgetary Integrity
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Operating Performance
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Cost of programs versus performance of programs
Management of assets and liabilities
Stewardship
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Expectations gap
How detailed can general purpose reports be?
Sustainability
Contribution to nation’s welfare
Systems and Controls
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Adequacy of systems and controls
Elements – Draft Definitions
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An asset is a resource that embodies
economic benefits or services that the
federal government can control.
A liability is a present obligation of the
federal government to provide assets or
services to another entity at a determinable
date, when a specified event occurs, or on
demand.
How to Monitor FASAB’s Work
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www.fasab.gov includes:
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Briefing papers for each meeting (click on
meetings)
Active project pages with a full history of Board
deliberations (click on Active Projects)
Instructions on subscribing to our electronic
newsletter (click on FASAB E-mail Service)