Talking to the GASB.

• Author: Rose, Pete
• Position: Governmental Accounting Standards Board

The Governmental Accounting Standards Board (GASB) is responsible for establishing accounting and financial reporting standards for state and local governments. In setting standards, the GASB has a due process procedure that allows for comment at every step of the process. Unfortunately, the GASB does not always receive the broad base of comments it would like to have when it issues proposed standards.

The Ohio Municipal Finance Officers Association (MFOA) took an active role in responding to GASB's Governmental Financial Reporting Model. This article, reviewing the different points at which comments can be made and the Ohio MFOA procedure, is intended to encourage all government agencies to become involved in providing comments to the GASB, either directly or through an association.

GASB Due Process

Before a final standard is adopted, the GASB goes through a series of steps to get as much input as possible. The following are the types of documents issued by the GASB.

Discussion Memorandum. This document provides a definition of the problem, scope of the project, and the accounting and reporting issues; discusses research findings and relevant literature; and presents alternative solutions to the issues, along with arguments and implications related to each.

Invitation to Comment (ITC). This document provides respondents an opportunity to comment on the initial direction that the GASB is taking on an issue. Respondents are asked for their input on the issues set forth in the ITC. There may be more than one alternative presented in the ITC.

Preliminary Views (PV). This document presents the current direction in which the GASB is heading with respect to the issue. The PV gives respondents a chance to provide their input on the proposed direction. The document may contain a single preliminary view or a majority view along with an alternative view.

Exposure Draft (ED). This document is issued after the board has reached conclusions on the issues. The ED sets forth the proposed standards of financial accounting and financial reporting, the proposed effective date and method of transition, background information, and an explanation of the basis for the GASB's conclusions. The ED may contain the reasons why a board member opposed the standard.

Statement of Governmental Accounting Standards. This is the final document which contains the actual standards, effective date, and method of transition; it also contains background information an...