Tag: Bill Bergman

GASB proposals would stretch meaning of accrual accounting

Mary Pat Campbell

Link: https://www.accountingtoday.com/opinion/gasb-proposals-would-stretch-meaning-of-accrual-accounting

Excerpt:

Every taxpayer and beneficiary of government services and benefits should care about good government accounting. Accountants and other financial professionals should take special note because GASB is attempting to change one of the basic tenets of accounting. This is a rare opportunity to convince GASB to reverse course and move toward true accrual accounting in budgeted funds statements.

GASB currently has two exposure drafts out for public comment: Project 3-20, “Recognition of Elements of Financial Statements,” and Project 3-25, “Financial Reporting Model Improvements.” Together, these proposals assert a foundation in something called the “short term financial resources measurement focus and accrual basis of accounting.”

The proposals, most importantly, do not relate to government-wide financial statements such as the Statement of Net Position (a balance sheet) and Statement of Activities (an income statement), both of which have significantly firmed up their accrual accounting foundations in the last decade. GASB’s proposals relate instead to governmental funds statements, such as those for general funds, which are widely used for budgeting purposes.

Author(s): Bill Bergman

Publication Date: 11 February 2021

Publication Site: Accounting Today

Critics Decry GASB Standards That Allow Governments to Hide Debt

Mary Pat Campbell

Link: https://townhall.com/columnists/johnnykampis/2021/02/05/critics-decry-gasb-standards-that-allow-governments-to-hide-debt-n2584229

Excerpt:

The Chicago-based Truth in Accounting (TIA), a financial watchdog, is fighting the efforts of the Government Accounting Standards Board (GASB) to enshrine a system of accounting into place the group says allows governments to paint a misleading picture of taxpayer debt.

GASB’s “Project 3-20: Recognition of Financial Statement Elements,” has seen its share of blowback from concerned parties. The concept would allow governments to continue their standard of cash-based accounting, which allows bureaucrats to prepare financial reports that show expenses only when the money is paid, not when the debt is incurred. TIA argues that this allows governments to show a rosier picture of taxpayer debt than what’s reality, helping government officials to kick the can down the road.

Author(s): Johnny Kampis

Publication Date: 5 February 2021

Publication Site: Townhall