FASAB Coming of Age

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FASAB Coming of Age

• The Federal Accounting Standards Advisory Board
• Tom Allen, CPA
• Wendy Comes, CPA

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Disclaimer

• Views expressed are those of the speaker. The
  Board expresses its views in official
  publications.

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Recent Issuances Becoming Effective

• Trust Funds
• Earmarked Funds
• Fiduciary Funds
• Technical Bulletin - Asbestos

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Implementation Guidance for Standards in
Development

• Stewardship Land Heritage Assets
• Inter-Entity Costs
• NASA Theme Assets
• Interpretation Remanufactured Items

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Status of Major Projects

• Conceptual Framework
• Objectives
• Elements
• Social Insurance and Research on Other
  Liabilities
• Natural Resources

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Conceptual Framework Phases

• Objectives and qualitative characteristics
• Elements and Recognition Criteria
• Financial Reporting Model and Sustainability
  Reporting
• Measurement Attributes
• Entity

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Objectives

• Roundtables
• Strategic Planning White Paper
• Defining the Boards role and priorities in
  meeting the broad objectives of SFFAC 1

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Roundtable Meetings - Objectives of Federal
Financial Reporting

• Objective 1 Budgetary Integrity
• Objective 2 Operating Performance

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Reporting Objectives - continued

• Objective 3 Stewardship
• Objective 4 Systems and Control

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Elements

• 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.

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Recognition Criteria

• An item meets the definition of an element.
• The item is measurable. (Quantifiable in monetary
  terms.)

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Sustainability

• A major component of the federal reporting model
  under consideration.
• Fiscal outlook
• A task force approved at the July meeting.

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Measurement Attributes

• Identification of the universe of attributes
  (measurement techniques versus attributes)
• Determine when it is appropriate to use each
  attribute

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Reporting Entity

• SFFAC 2 Entity and Display
• Review the characteristics of entities that make
  them reporting entities
• Test the criteria for inclusion in a reporting
  entity
• Control
• Financial interdependence
• Standards implementing concepts
• Work beginning next quarter

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History of Social Insurance

• Deliberated in 70s and 80s
• Deliberated during SFFAS 5
• SFFAS 17 Compromise
• Actuarial NPVs
• Cash flows in relation to GDP
• Beneficiary to worker ratios
• Tax needed for actuarial balance
• SFFAS 25 (as amended)
• Made the Statement of Social Insurance basic

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Social Insurance

• A majority of the Board tentatively agrees that
  an obligation exists prior to due and payable (40
  quarters work in covered employment)

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Social Insurance Issues

• Understandability
• Ability to change law
• Size and volatility
• Not useful from a budgetary perspective

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Natural Resources

• Recognizing oil and gas proved reserves at
  calculated 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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Natural Resources, continued

• Applying the oil and gas framework to
• Coal
• Timber
• Grazing
• Other

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LOOKING AHEAD
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Refining/Completing the Federal Reporting Model

• Inclusion of all assets/liabilities and
  appropriately recording changes in them.
• The reporting entity
• Reporting beyond the traditional balance sheet
  and operating statement

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Additional Reporting

• Statement of Social Insurance
• Sustainability Reporting
• Articulation of these Statements to traditional
  Balance Sheet and Operating Statements

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Expanded Outreach to Potential Federal Financial
Report Users

• Increase due process feedback
• FASABs educational role
• User focus meetings

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My Perception of FASABs Biggest Challenges

• Independence
• Resources

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Initial Assessment

• Competent staff
• Committed Board
• Generally strong agency support

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FASAB On-Line Resources

• www.fasab.gov
• All exposure drafts and final pronouncements.
• Electronic mailing list for updates including
  newsletter and requests for comment.
• Active project pages including briefing
  materials.