OECD Accruals Symposium
U. S. Federal Accounting
Standards Update
Tom Allen
FASAB Chairman
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Disclaimer
 Views expressed are those of the
speaker. The Board expresses its
views in official publications.
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Primary Focus of FASAB
 Stewardship--Information on whether:
 the government’s financial condition improved
or deteriorated
 programs are sustainable as currently
constructed
 Operating Performance—Information to
evaluate:
 The service efforts, costs and accomplishments
of government
 The manner in which these are financed
 Management of the entity’s assets and
liabilities
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FASAB Projects
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Fiscal Sustainability Reporting
Social Insurance
Revisiting Conceptual Framework
Changes in Assumptions
Oil and Gas Resources
Source of GAAP
Legacy PP&E Estimates
AAPC – Technical Releases
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Social Insurance
 Purpose
 Provide information on
 Impact on the government’s financial condition
and position as a result of the programs
 Whether social insurance programs are
sustainable
 Likelihood social insurance programs will be able
to provide benefits to those planning on receiving
them
 Background
 Social Insurance programs have high
participation among citizens
 Fiscal challenges
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Social Insurance
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Information that may be presented
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Present value of program revenues and scheduled benefits
Causes of the changes in present values during the reporting
period
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Assumption changes
Legislation
Future amounts attributable to events during the period(?)
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Cash flow projections as a percent of GDP and taxable payroll
Dependence ratio
Sensitivity analysis
RSI
Issues
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Italicized items are currently required by standards.
What is essential social insurance information?
How should information be displayed?
When expense and liability should be recognized?
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Changes in Assumptions &
Selecting Discount Rates
 Purpose
 Guidance for displaying changes in
assumptions
 Provides more transparent and useful
information prepared in a more consistent
manner.
 Background
 Change in assumptions may exceed all other
costs
 What Treasury rates should be used when
calculating present values for expense and
liability amounts
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Changes in Assumptions &
Selecting Discount Rates
 Exposure Draft Proposed:
 Gains and losses from changes in
assumptions displayed on the statement
of net cost separate from other costs
and exchange revenue
 Components of expenses associated
with long-term liabilities disclosed in
notes
 Guidance on what rate to use in present
value measurements of long-term
liabilities
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Oil and Gas Resources
 Purpose - recognizing assets and
liabilities for federal oil and gas
resources
 Background
 Federal government has extensive oil
and gas resources throughout the
country and on the Outer Continental
Shelf.
 Quantity and value of these assets not
provided
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Oil and Gas Resources
 Recognizing asset for oil and gas
proved reserves at current value
 Results in information on:
 Quantity of proved reserves
 Value of proved reserves
 Royalty revenue and depletion of
reserves
 Extensive disclosure and RSI
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Applicability of FASB GAAP
 Purpose
 Provide FASAB guidance regarding applicability
of FASB GAAP to federal entities
 Background
 1999 - AICPA recognized FASAB as standardssetter for federal entities
 Some entities follow FASB GAAP
 Federal government corporations
 US Postal Service
 Others
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FASB GAAP
 Issues
 What are user needs
 What requirements would address user
needs and Treasury reporting needs
 What are the reporting costs, burdens,
challenges
 Status
 Surveying entities
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Estimating the Cost of Legacy
PP&E
 Purpose:
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Reduce the cost of compliance through amendment to
standards.
 Background:
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Some LARGE agencies do not have systems to
capitalize cost as PP&E is acquired.
The benefits of PP&E accounting are realized primarily
through timely data derived from quality systems.
The cost of estimating cost may exceed the benefits of
doing so.
 Issue: When do you stop permitting estimation
based on less rigorous documentation?
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AAPC Status and Activities
 AAPC is the source for level D GAAP
(Technical Releases).
 Representatives from central agencies, IG and
CFO communities, and FASAB.
 Implementation guidance can be provided
relatively quickly.
 Recently Completed efforts:
 Inter-entity cost implementation
 Stewardship Land/Heritage Assets
Implementaton
 Active Effort – General PP&E Q&A
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AAPC – Q&A regarding General
PP&E
 Concerns raised regarding the level of
precision sought during audits and
continuing questions regarding
permissible treatments.
 Questions expected regarding:
 Group and Composite depreciation
methods
 Capitalization of indirect cost
 Spare parts
 Deployed assets
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Recently Issued
 SFFAC 5, Definitions of Elements and
Basic Recognition Criteria for AccrualBasis Financial Statements
 Defines 5 elements
 Provides basic recognition criteria
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Convergence with Public Sector
Accounting Standards Setters
 FASAB monitors others’ progress on
standards - seeking opportunities to
collaborate
 Members attend meetings
 Staff track projects
 FASAB/GASB Collaboration on
Measurement Attributes Planned
 Participation in IPSASB’s Fiscal
Sustainability Project Planned
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FASAB On-Line Resources
 www.fasab.gov
 All exposure drafts and final
pronouncements.
 Electronic mailing list for updates.
 Active project pages include deliberative
material.
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